A more thorough explanation:

medfee (med-fee). Hist. A bribe or reward; compensation given for things exchanged of unequal value.

• During the Middle Ages, it was common for merchants to offer a medfee to officials in order to avoid paying high taxes.
• A knight might offer a medfee to a lord in exchange for a higher rank or title.

These examples illustrate how a medfee was used as a form of bribery or compensation for something of unequal value. In both cases, the person offering the medfee was seeking to gain an advantage or avoid a disadvantage by offering something of value to the other party.