I signed a contract with a Contractor in August as the Contractor stated that his company has a license to perform home remodeling project. The contract includes the scope of work, estimated completion date, contract termination clauses and a provision stating that the Contractor will comply with state and local licenses requirements. However, I found out in September that this Contractor is a sole ownership with only C-54 License, which is for Tile work.

As the Contractor’s workforce started on the remodeling process, I allowed them to continue even though the Contractor did not have the proper Plumbing/Electrical licenses. Recently, some Contractor’s workers stopped working for at least three weeks. After a conversation with one of the workers, I found out that he and his team stopped working because they did not get paid from the Contractor and the Contractor hired him and his team with daily rate basis (not a per hour wage).

I spoke with the contractor and requested that he provide me proper licenses in order to continue on the Project and he stated that he does not have plumbing/electrical licenses and he explained that it’s very normal to do house remodeling without those licensees. However, he stated that he could team up with another contractor(s) who has proper license to continue on the Project. Contractor also blamed on my wife and me that we signed the contract with him before checking whether he has proper licenses to perform.

My wife and I decided to stop this contract and prepare a notice of termination due to Contractor breaches (Contractor working without proper licenses). Can I terminate this Contract? Since the Contractor has finished portion of the work under the Contract, including portion of the Plumbing and Electrical work and I have made progress payment already. Can the Contractor still file a claim against us for breaching contract?