Compensation – payment of damages, or any other act that a court orders to be done by a person who has caused injury to another, in theory making the injured person whole, or remuneration for services rendered (i.e. salary, wages)

Notice:  Generally, the term compensation is used in three forms; the first set of definitions below pertains to remuneration for services and redress for property taken or injury caused by the taking of property under the power of eminent domain, the second set of definitions in regard to worker’s compensation, and the third in regard to damages in civil law.

n. (14c)

1. Remuneration and other benefits received in return for services rendered; especially, salary or wages. — adjective forms (used for all below definitions) compensatory, compensational, [1]

1. A return for a benefit conferred or promised, that is, a consideration.  Searcy v Grow, 15 Cal 117; a remuneration for services, whether in the form  of a fixed salary, fees, commissions, or perquisites of whatever character.  43 Am J1st Pub Of § 340; redress for property taken or injury caused by the taking of property under the power of eminent domain.  Symonds v Cincinnati, 14 Ohio 147. [2]

1. Remuneration for services, whether in the form  of wages, salary, fees, or commissions. [3]

     Excerpt from Kurt H. Decker & H. Thomas Felix ii’s Drafting and Revising Employment Contracts (1991):

     “Compensation consists of wages and benefits in return for services. it is payment for work. if the work contracted for is not done, there is no obligation to pay. [Compensation] includes wages, stock option plans, profit sharing, commissions, bonuses, golden parachutes, vacation, sick pay, medical benefits, disability, leaves of absence, and expense reimbursement. [4]

2. SETOFF (2). [1]

2. A set-off in the Scottish law; redress in damages for injuries generally; the payment  made to an injured employee by the employer under a workmen’s compensation act.   As the term is used in workmen’s compensation acts, it means the money and for teh persons designated by the act, and it does not refer to the compensatory damages which may be recovered in an action at law for a wrong done or a contract broken.  Mosely v Empire Gas & Fuel Co. 313 Mo 225, 281 SW 762, 45 ALR 1223, 1232. [2]

2. Payment for injury or loss made under a workers’ compensation act to an injured employee. [3]

3. Payment of damages, or any other act that a court orders to be done by a person who has caused injury to another.  *  In theory, compensation makes the injured person whole. [1]

3. A civil law term meaning the extinction of debts of which two persons are reciprocally debtors to one another, by the credits by which they are reciprocally creditors to one another.  20 Am J2d Countel etc. § 5. [2]

3. Payment for injury or loss; damages.
     See deferred compensation; just compensation; unemployment compensation acts. [3]

Various forms of Compensation:

accrued compensation – (1919) Remuneration that has been earned but not yet paid.

deferred compensation – (1926) 1. Payment for work performed, to be paid in the future or when some future event occurs. 2. An employee’s earnings that are taxed when received or distributed rather than when earned, such as contributions to a qualified pension or proflt-sharing plan.

just compensation – a payment by the government for property it has taken under eminent domain, which must be fair both to the person whose property is taken and to the public, who must pay for it. — aka adequate compensation; due compensation; land damages.

> unemployment compensation. (1921) Compensation paid at regular intervals by a state agency to an unemployed person, esp. one who has been laid off. –Also termed unemployment insurance; unemployment


unreasonable compensation. (1946) Tax. Compen sa~ tion that is not deductible as a business expense because the compensation is out of proportion to the services actually rendered or because it exceeds statutorily

defined limits. IRC (26 USCA) § 162(m).

Compensation Clause. Constitutional law. The clause of the U.S. Constitution providing for federal judges to be paid. US. Const. art. III, § 1, cl. 2.

compensation neurosis. (1924) A neurotic mental condition in a plaintiff who has dwelled on the prospect of receiving personal-injury damages or other compensation, the principal effects being that the plaintiff unconsciously exaggerates and prolongs the symptoms of the injury or harm. 0 Compensation neurosis is not a distinct diagnosis recognized bythe psychiatric community.

compensation period. The time fixed by unemployment or workers’compensation law during which an unemployed or injured worker is entitled to receive compensation.

compensatories. See compensatory damages (1) under DAMAGES.

compensatory damages. See DAMAGES.

compensatory mitigation. See ENVIRONMENTAL MITIGATION.

compensatory payment. Family law. A postmarital spousal payment made by the richer ere-spouse to the poorer one and treated as an entitlement rather than as a dis cretionary award. 0 Compensatory payments are set by statute and are based on a formula using the length of


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[1]: Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black, Editor in Chief Bryan A. Garner. ISBN: 978-0-314-61300-4

[2]: Ballantine’s Law Dictionary with Pronunciations
Third Edition by James A. Ballantine (James Arthur 1871-1949).  Edited by William S. Anderson.  © 1969 by THE LAWYER’S CO-OPERATIVE PUBLISHING COMPANY.  Library of Congress Catalog Card No. 68-30931

[3]: Ballantine’s Law Dictionary Legal Assistant Edition by Jack Ballantine (James Arthur 1871-1949).  Doctored by Jack G. Handler, J.D. © 1994 Delmar by Thomson Learning.  ISBN 0-8273-4874-6.

[4]: Kurt H. Decker & H. Thomas Felix ii, Drafting and Revising Employment Contracts 5 3.17, at 68 (1991).


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