A rotary power tool comprises a motor, an output shaft that receives torque from the motor, a clutch positioned between the motor and the output shaft for selectively engaging the output shaft to the motor, and a transducer for detecting an amount of torque transferred through the clutch to the output shaft. The clutch is capable of being actuated from a first mode in which the output shaft is engaged to the motor, to a second mode in which the output shaft is disengaged from the motor, in response to feedback from the transducer of the detected amount of torque transferred through the clutch.