Is an independent contractor entitled to repayment of previously paid rent following termination due to breach of contract?

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Is an independent contractor entitled to repayment of previously paid rent following termination due to breach of contract?

An independent contractor in my business was let go from her position following a breech of contract last week. Then 4 months ago, she chose to conduct a living social deal and paid a certain percentage of what she collected as per our rental agreement. About 2 weeks ago, prior to her being asked to leave, she made the decision to cancel the deal therefor having to refund payments back to living social. She is now threatening to sue me as she expects repayment for the percentage she paid for rent. I am uncertain as to what my rights are.

Asked on July 18, 2012 under Business Law, Iowa

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

An independent contractor under the laws of all states in this county is not an employee of the entity that the independent contract is with for services. As such, the terms of the independent contract controls the relationship of the parties where the independent contractor can be let go under the terms of the agreement.

Since that has happened, the company that ended the agreement with the independent contractor should not have any liability for any other agreements that the independent contactor had such as the "living social" that you have written about. Such would be solely the independent contractor's obligation.


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