Finder's Fee Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Finder's Fee, written in plain English, along with examples of how it is used.
What is Finder's Fee?
(n) Finders fee is the charge or remuneration payable to a person or entity to find or locate a particular property, article or information required by him
History and Meaning of Finder's Fee
A finder's fee can also be referred to as a referral fee or commission. It is an incentive or compensation given to a person or entity that connects two or more parties together to carry out a transaction or cause a deal to happen. The history of finder's fee dates back to the middle ages, where it was common for merchants to offer bounties to their colleagues for bringing in business opportunities. Since then, it has become a common practice in almost every industry and is used to reward people for playing a vital role in the success of a business deal.
Examples of Finder's Fee
- A person connects a potential employee with an employer, and the employer pays the person a finder's fee for introducing the new recruit.
- A real estate agent finds a buyer for a property, and a percentage of the sale goes to the agent as a finder's fee.
- An investment banker gets paid a finder's fee for locating potential investors for a company.
Legal Terms Similar to Finder's Fee
- Referral Fee: A payment made to someone who recommends a client or customer to a business.
- Commission: A percentage of the sale paid to a salesperson or a broker for services provided.
- Success Fee: A payment that is made after the successful completion of a project or transaction.