Oregon Construction Contractors (CCB) Practice Test

What legal implication does a lapse in a contractor's license have during ongoing construction?

1. It leads to automatic project termination

2. The contractor may face legal actions for breach of contract

3. It may affect the contractor's eligibility for future projects

4. The contractor may lose rights to legal remedies

The correct answer is: The contractor may lose rights to legal remedies

A lapse in a contractor's license during ongoing construction can significantly impact the contractor's rights to pursue legal remedies. When a contractor operates without a valid license, they typically forfeit the legal protections that licensed contractors enjoy. This means that the contractor may have difficulty enforcing contracts, obtaining payments, or claiming damages in the event of disputes. The law often stipulates that a contractor must be properly licensed to initiate legal proceedings related to the work they are performing. As a result, if a contractor's license is not valid, they may lose important rights that would normally be available to them, making option D the most accurate reflection of the legal implications of such a lapse. In this context, other responses might suggest outcomes related to project termination or breach of contract. While a lapse in a license could lead to complications in these areas, it is the loss of legal remedies that directly arises from being unlicensed in the course of a contract. This concept underscores the importance of maintaining an active and valid contractor's license throughout any construction project.