Agency is a contractual relationship, involving an agent and a principal, in which the agent is given the authority to represent the principal in dealings with third parties. The most common example is an employer-employee relationship wherein an agent (employee) is given the power by a principal (employer) to act on his or her behalf. An agent may be an employee or an independent contractor. A principal is a person who employs an agent to act on his or her behalf.

A principal (employer) has full control over his or her employee. The employee must complete the work assigned by following the instructions of the employer. An independent contractor is an individual hired by an employer to perform a specific task. The employer has no control over the methods used by the independent contractor. The following are among those who act independently of an employer: electricians, carpenters, plumbers, television repairpersons, and automobile mechanics. brokers, and investment advisors. Independent contractors may also employ others in their Independent contractors also include professional agents such as lawyers, physicians, accountants, securities brokers, insurance brokers, real estate field who will be bound to them as employees.

• The relationship between employers and employees or independent contractors is a fiduciary one. Why?
• What are the Duties of Employees?
• What are the Duties of Independent Contractors?
• How does a court determine if you are an employee or an independent contractor?
• As an employer which would you hire?