Which of the following describes an independent contractor in agency law?

An independent contractor in agency law refers to an individual or entity that is contracted to perform specific tasks or services for another party (the principal) but operates as a separate entity rather than as an employee. This means that while they agree to complete certain work, they maintain a level of autonomy and are not under the direct control of the principal in terms of how they execute their tasks.

Independent contractors typically establish their own work hours, methods, and tools, which underscores their status as independent rather than subordinate to an employer's directives. Because they are not classified as employees, they also do not receive the same benefits, salary structures, or job security associated with employment. Rather, they are compensated based on the terms of their contract, which may be a flat fee, hourly rate, or commission, depending on the agreement made with the principal. This distinction is crucial in understanding the nature of employment relationships and the implications for liability and responsibility under agency law.