How does an independent contractor differ from an agent?

The distinction between an agent and an independent contractor is primarily rooted in the degree of control and the nature of the relationship with the principal. An agent acts on behalf of a principal, and hence is subject to the principal's control regarding the means and methods by which they accomplish the work. This relationship creates legal obligations and authority to bind the principal in contractual duties.

On the other hand, an independent contractor operates with a significant level of autonomy. They manage their own business, including determining how to carry out the work and often establishing their own terms of service. This independence means that the contractor is not under the same level of control as an agent and does not create legal relationships on behalf of the principal. Thus, the understanding of the relationship dynamics is crucial in differentiating the two roles, as it highlights the significant independence that independent contractors maintain compared to agents.