Also known as: commensurate to the income · reasonable compensation · proportional to earnings
Written by attorneys · grounded in primary & secondary sources — see below
A statutory allocation rule requiring that income assigned to a transferor or licensor of intangible property equal the income generated by the intangible itself.
Carlos Castillo was sued by a third party after Caleb Chang committed a tort that forced Carlos to defend his interests in court. Carlos incurred substantial attorney fees in that earlier action. Under the governing rule he recovers reasonable compensation for those fees from Caleb.
Christian Coleman and Connor Clark formed a general partnership with equal profit shares. Christian performed full-time mechanical work while Connor handled only remote bookkeeping. Christian later sought a salary for his extra labor. The default rule bars any such remuneration because the partners had no separate compensation agreement and the business was not winding up.
Cecilia Cabrera was appointed personal representative under a will that set a fixed fee. Before qualifying she filed a written renunciation of that provision. She then performed ordinary estate services and received reasonable compensation measured by the value of her work rather than the will's formula.
Select any source to read its text and confirm it supports the definition.
A partner receives separate compensation only for services rendered during winding up of the partnership business. In all other phases partners are compensated solely through their agreed share of profits unless the partners have made an express contrary agreement.
Yes. After filing a written renunciation the personal representative becomes entitled to reasonable compensation for services actually rendered even though the will specified a different amount.
Recovery is allowed when the defendant's tort required the plaintiff to bring or defend a lawsuit against a third person to protect the plaintiff's own interests. The fees must be reasonable and directly caused by the earlier litigation.