Unlicensed contractor affordable but risky

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Q: I am planning a kitchen remodel. Based on all the bids, I have short-listed two contractors. One is a licensed general contractor who has given me good references; the other is an unlicensed one who says he will get the job done by himself and his family members. His bid, for the exact same materials that I want him to buy from my chosen wholesale suppliers, is almost 30 percent less than the licensed contractor's. The unlicensed guy has given me good references as well. If I employ the licensed guy, he is willing to do all the permit work himself and has given me a full quote including those costs. The unlicensed guy says I can get the homeowner-builder permit myself, and he will ensure full building-code compliance and that the work passes inspections. If I go with the cheaper alternative of the unlicensed guy, apart from the risk that I am taking for his lack of liability, and the fact that he is not bonded, am I breaking any California law? Also, the law says a c...