Compensation: The source of compensation does not determine agency. An agent does not necessarily represent the person who pays his or her commission. In fact, agency can exist even if no fee is involved (called a gratuitous agency). Buyers and sellers can agree, whichever way they choose, to compensate the broker, regardless of which is the agents principal. For instance, a seller could agree to pay a commission to the buyers agent. The written agency agreement should state how the agent is being compensated and explain all the alternatives available.

 

Related Words

Compensation: A defense mechanism, operating unconsciously, by which one attempts to make up for real or fancied deficiencies. Also a conscious process in which one strives to make up for real or imagined . . . View Full Definition

Infrared Compensation Index: Used to compensate the focus for black and white infrared film. Color ir film generally does not require compensation.

Compensation Committee: Committee of the board of directors that sets general compensation guidelines for a managed care plan, sets the CEO's compensation, and approves and issues stock options.

Workers Compensation: A state-mandated insurance program that provides benefits for healthcare costs and lost wages to qualified employees and their dependents if an employee suffers a work-related injury or disease.