Legal Memorandum: Liability of Principal for the Acts of Independent Contractors

Issue: Whether a principal can be considered liable for the acts of independent contractors in Illinois?

While a principal is generally not liable for the acts of independent contractors, an exception is made when the principal “orders or directs the acts causing the harm, negligently selects an incompetent contractor, or retains control over the operative details of the contractor’s work.”  Milz v. M.J. Meadows, Inc., 234 Ill. App. 3d 281, 289, 599 N.E.2d 1290, 1295, 175 Ill. Dec. 276 (1st Dist. 1992).  The Illinois Supreme Court recently stated that whether a person is an independent contractor depends on the facts and circumstances of the case.  There is no precise formula for deciding whether a person is an agent or an independent contractor.  “Rather, the determination of whether a person is an agent or an independent contractor rests upon the facts and circumstances of each case.”  Petrovich v. Share Health Plan, 188 Ill. 2d 17, 46, 719 N.E.2d 756, 772, 241 Ill. Dec. 627 (1999).  Facts courts consider include (1) the hiring, (2) the right to discharge, (3) the manner in which the servant is directed, (4) the right to terminate the relationship, and (5) the character of the master’s supervision over the work.  Id. at 46, 719 N.E.2d at 772.  None of these factors is conclusive.  “They merely serve as guides to resolving the primary question of whether the alleged agent is truly an independent contractor or is subject to control.”  Id. at 47, 719 N.E.2d at 773.  The key question, of course, is whether the principal retains the right to […]