The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractualШУУД ҮЗЭХ and
The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold. This is a way for firms to solve the principal–agent problem, by attempting to realign employees' interests with those of the firm.[1] One of the most common means of attempting to align principal and agent interests is to design a contract with incentives that track agent performance. The principal–agent theory provides an explanation for the dissimilarities across the marketing firms in the types of compensation plans used by them, such as fixed salary, straight commission or a combination of both fixed salary and straight commissions.[2] Although many types of commission systems exist, a common form is known as on-target earnings, where commission rates are based on the achievement of specific targets that have been agreed upon between management and the salesperson. Commissions are intended to create a strong incentive for employees to invest maximum effort into their work. Note that often a firm embracing a commission structure may not involve employees, but may solely establish themselves using independent contractors. An example of this in the USA could be a real estate agent.
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