Independent Contractor Agreement (Agent–Broker) — Arkansas Edition Template

The agent–broker relationship in U.S. real estate runs on independent contractor status — and that status is legally fragile if the paperwork is wrong. Federal tax law provides a statutory safe harbor: under 26 U.S.C. § 3508, a licensed real estate agent is treated as a non-employee for federal tax purposes if substantially all compensation is tied to sales output rather than hours worked AND there is a written contract providing the agent will not be treated as an employee for federal tax purposes. No written agreement, no safe harbor. State-level classification (wage law, unemployment, workers' comp) adds another layer — many states have real-estate-specific carve-outs from tests like California's ABC test (see Cal. Bus. & Prof. Code § 10032), but those carve-outs typically also require a written independent contractor agreement.

This 7-page agreement is built to hold that status together. It covers: engagement and license status; the § 3508 written-contract language stating the agent will not be treated as an employee for federal tax purposes; commission-based compensation with a defined split schedule and changes-on-notice mechanics; broker supervision duties that coexist with contractor status (license law requires broker supervision — the agreement distinguishes regulatory supervision from employment-style control); expenses, fees, and chargebacks; E&O insurance; lead and listing ownership; conduct, compliance, and fair housing obligations; termination and post-termination commission treatment for pending deals; and dispute resolution.

The 50-state variation notes cover state contractor statutes, workers' comp election rules, and states requiring specific contract language. This is the single most important document in a brokerage's file cabinet — use this template as a strong starting point and have brokerage counsel adapt it to your state.

About this Arkansas Edition: Every template was redrafted around the Arkansas Real Estate License Law (Ark. Code Ann. Title 17, Chapter 42) and the Arkansas Real Estate Commission's agency regulations, under which dual agency is permitted only with the informed written consent of both parties and all compensation must flow through the principal broker. Because Arkansas has no mandatory statutory seller disclosure form, the disclosure templates are built as voluntary, actual-knowledge disclosures framed by Arkansas fraud and misrepresentation law, the Arkansas Deceptive Trade Practices Act (Ark. Code Ann. § 4-88-101 et seq.), and the licensee's regulatory duty to disclose known material defects. Writings are keyed to the Arkansas statute of frauds (Ark. Code Ann. § 4-59-101) and the Arkansas Uniform Electronic Transactions Act (Ark. Code Ann. § 25-32-101 et seq.), the broker lien statute is treated as limited to commercial real estate (Ark. Code Ann. Title 18, Chapter 44, Subchapter 3), and the independent contractor template references Arkansas's covenant-not-to-compete statute (Ark. Code Ann. § 4-75-101).