Legal Definitions - commission

The term commission has several distinct meanings in legal and business contexts:

• A Payment for Services: Most commonly, a commission refers to a payment made to an individual or entity for services rendered, typically calculated as a percentage of the value of a transaction, sale, or completed task. This type of payment is often used to incentivize performance and can be either the sole form of compensation or an additional payment on top of a fixed salary.

  • Example 1 (Sales Incentive): A car salesperson earns a base salary of $3,000 per month, plus a 5% commission on the sale price of every vehicle they sell. If they sell a car for $40,000, they receive an additional $2,000.

    Explanation: This illustrates commission as a percentage-based payment that supplements a fixed wage, directly rewarding the salesperson for successful transactions.

  • Example 2 (Brokerage Fee): An art dealer facilitates the sale of a rare painting between a collector and a museum. Upon the successful completion of the sale, the dealer receives a 15% commission from the seller for their brokerage services.

    Explanation: Here, commission is the fee paid for a professional service (brokering a sale), calculated as a percentage of the transaction's value.

• Official Authority or Body: In another context, a commission can signify an official authorization or warrant granted by a government, court, or other authoritative body, empowering a person to perform specific official duties. It can also refer to a group of individuals formally appointed to investigate a particular issue, manage a specific public service, or carry out a designated task.

  • Example 1 (Government Body): After a series of public complaints about utility services, the state government established a new Public Utilities Commission to regulate service providers and ensure fair practices.

    Explanation: This demonstrates "commission" as a body of persons appointed with official authority to oversee and regulate a public service.

  • Example 2 (Official Appointment): Upon being sworn into office, a newly appointed notary public receives their official commission from the Secretary of State, granting them the legal authority to witness and certify documents.

    Explanation: This shows "commission" as a formal warrant or authority granted by a government entity, empowering an individual to execute official acts.

• The Act of Performing an Action: Furthermore, the term commission can describe the act of performing or carrying out an action, often used in a legal context to refer to the perpetration of a crime or an offense.

  • Example 1 (Criminal Act): The security footage clearly showed the suspect in the act of commission of the robbery at the convenience store.

    Explanation: This example uses "commission" to describe the act of perpetrating or carrying out a crime (the robbery).

  • Example 2 (Offense): The company faced legal penalties for the commission of environmental violations, including illegal dumping of waste materials.

    Explanation: Here, "commission" refers to the act of performing an illegal or prohibited action, specifically environmental violations.