Independent Contractor Agreement (Agent–Broker) — Tennessee 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 Tennessee Edition: the template and its drafting notes are adapted for Tennessee practice under the Tennessee Real Estate Broker License Act of 1973, T.C.A. § 62-13-101 et seq., and its broker-relationship provisions at T.C.A. § 62-13-401 et seq., administered by the Tennessee Real Estate Commission (TREC). Tennessee's default relationship is facilitator (transaction broker) status unless a written agency agreement is signed, so this edition's agency documents are drafted as the written agreements the statute requires; Tennessee permits disclosed dual agency with the informed written consent of both parties and authorizes designated agency under T.C.A. § 62-13-405, so the agency-disclosure document remains a Dual Agency Disclosure & Informed Consent that also presents the designated-agency and facilitator alternatives and references the required written Confirmation of Agency Status. Seller disclosure follows the Tennessee Residential Property Disclosure Act, T.C.A. § 66-5-201 et seq., electronic signatures rely on Tennessee's Uniform Electronic Transactions Act, T.C.A. § 47-10-101 et seq., and the statute of frauds at T.C.A. § 29-2-101 is referenced for land-sale writings. Tennessee-specific drafting notes accompany the template for review before use.