California Contractors License Law Practice Exam

Is a contractor entitled to compensation for work done after a contract has been canceled by a customer?

1. Yes, fully compensated

2. Only for pre-cancellation work

3. No compensation at all

4. Compensation minus fees

The correct answer is: Only for pre-cancellation work

A contractor's entitlement to compensation for work done after a contract has been canceled hinges on the specifics of the situation, including the legal framework governing contracts and the terms outlined in the agreement itself. Generally, when a contract is canceled by a customer, the contractor is not entitled to compensation for any work performed after the cancellation date. While the contractor may be entitled to compensation for work completed up until the point of cancellation (reflecting the principle that they should be paid for services already rendered), any work undertaken post-cancellation does not warrant compensation. This principle ensures that a contractor cannot unilaterally proceed with work once a contract has been lawfully terminated, as it would not align with the customer's intention expressed in the cancellation. In contrast, options suggesting full compensation or compensation minus fees do not align with the common interpretation of contractor rights after cancellation, as those would imply entitlement beyond the agreed terms due to the customer's termination of the contract. Thus, the idea that compensation is limited to pre-cancellation work reflects the legal standards regarding contract termination and the expectation of payment for services rendered up to that point.