Contractor Registration in Washington State: Why It's an Important Prerequisite To File Breach of Contract Lawsuits

In Dobson v. Archibald, the Washington Supreme Court addressed and confirmed statutory analyses concerning the required contractor registration in Washington. 1 Wash. 3d 102, 523 P.3d 1190 (2023). Contractors and potential contractors should take note, as failure to register could bar any action to enforce a construction contract.

Main Takeaways

• Formally adopts a multi-factor test for the "facts and circumstances" analysis as a rule to determine if a person or entity is "engaged in the business or acting in the capacity of a contractor." That rule considers the following factors:
  • the nature of the relationship (e.g., personal or professional) with the client;
  • the time when performance of construction began (e.g., during working hours or "moonlighting");
  • whether the agreed-upon price for construction services was substantially below the going rate for similar work;
  • the public's perception of the individual's role in the construction services; and
  • which party solicited the construction contract.
• Registration is a strict prerequisite to bring suit, thus failure to register bars a breach of contract action.

Further Analysis

• Contractors in Washington can sue clients to recover compensation or for breach of contract only if the contractor is properly registered, and the contractor holds the burden to allege and prove its registration.
• Failure to register bars the contractor from bringing the suit entirely, and this requirement must be strictly construed.
• However, the effect of nonregistration under this statute is that the contractor cannot recover in court, not that the contract is rendered void or illegal.

It is also important to note that, unlike California, failure to register does not permit an owner to "claw back" amounts paid to an unregistered contractor.

It is advisable for contractors, including those unsure about their registration requirements under Washington law, to consult legal counsel experienced in construction registration. We can also provide assistance with the registration process.