When the relationship between a principal and an independent contractor is not an employment relationship, it is an agency relationship.

Question

Quizplus · Accepted Answer

An agency relationship involves a principal granting authority to an agent to act on their behalf, which can occur in employment relationships and with independent contractors, but the mere engagement of an independent contractor does not automatically create an agency relationship. The key distinction lies in the level of control and autonomy, not the employment status.

When the Relationship Between a Principal and an Independent Contractor