Definition
Brokerage refers to two related but distinct concepts:
1. The business, trade, or occupation of a broker — that is, the activity of acting as an intermediary who brings parties together to negotiate or complete a transaction, without taking title to the property or goods involved.
2. The compensation — typically a commission or percentage fee — paid to a broker in exchange for those services. In this sense, brokerage is the price of the intermediary relationship: the broker's earned reward for facilitating a sale, purchase, lease, loan, or other commercial transaction.
The term appears across multiple commercial contexts, including real estate, securities, insurance, freight, and commodities. In each context, the broker operates as an agent for one or both parties, and brokerage is the fee that defines and compensates that agency relationship.
Common Language
Modern common usage (Wiktionary): A business or firm that acts as a broker (e.g., a stockbroker); the occupation of being a broker; or the commission paid to a broker.
Historical common usage (Webster's 1913): The business or employment of a broker; also the fee, reward, or commission charged for transacting business as a broker.
The common and legal meanings align closely here — both recognize brokerage as the occupation and the fee. The legal distinction worth noting is that in law, brokerage as compensation carries specific agency-law consequences: it may determine whether a broker owes fiduciary duties, to whom those duties run, and whether the fee is properly earned (i.e., whether a valid transaction was actually consummated). Common usage treats brokerage loosely as any broker-related fee; legal usage scrutinizes when and whether brokerage is earned, forfeited, or shared.
Common Confusion
Brokerage is sometimes used interchangeably with commission, but the terms are not identical. Commission is the broader term for percentage-based compensation in any agency relationship. Brokerage is the specific form of commission earned by a broker — an intermediary who does not act as a direct party to the transaction. A selling agent may earn a commission; only a broker earns brokerage in the technical legal sense. The distinction matters when disputes arise over whether a fee was earned, split between co-brokers, or forfeited by failure to produce a ready, willing, and able counterparty.
Brokerage should also be distinguished from salary or retainer. Brokerage is contingent on the transaction; it is not ordinarily owed unless a deal is completed or, in some jurisdictions, unless the broker is the procuring cause of a completed transaction.
Why It Matters in Research
Researchers will encounter brokerage across a wide range of historical and modern legal contexts, and the word's dual meaning — occupation and fee — can create ambiguity in older documents. A contract provision entitling a party to "brokerage" may mean the right to act as broker, the right to receive a fee, or both; reading surrounding terms carefully is essential.
The legal significance of brokerage has evolved substantially. In the nineteenth century, brokerage was primarily a common-law agency concept governed by contract and custom. Through the twentieth century, securities brokerage became heavily regulated, first under state blue-sky laws and then under federal securities statutes, transforming what had been a common-law fee arrangement into a heavily supervised, licensure-dependent occupation. Research crossing that regulatory transition requires attention to which legal regime applies.
In real estate, brokerage law varies significantly by state, particularly on questions of when brokerage is earned (at signing of a contract, at closing, or upon producing a ready-and-willing buyer) and how brokerage agreements must be memorialized. Historical real estate cases frequently turn on oral brokerage agreements that would be unenforceable under modern statutes of frauds as applied to broker compensation.
Corpus researchers should also be alert to the Burrill entry, which includes an unrelated intrusion — the term BRUARIUM (heath ground) — immediately following the brokerage definition. This is a typographical artifact of the source dictionary's formatting and has no connection to brokerage. Do not treat it as a related legal concept.
Historical Dictionary Support
The four historical sources are in substantial agreement. Black's (both editions) and Bouvier define brokerage as the wages or commissions of a broker, plus his business or occupation. Burrill narrows slightly to the commission or percentage paid on the sale or purchase of property or the transaction of business — emphasizing the fee dimension over the occupational one, and grounding it specifically in property and commercial transactions.
None of the historical sources engages with the regulatory complexity that defines modern brokerage law, which is expected given their publication dates. They treat brokerage as a common-law commercial concept, with no reference to licensing requirements, securities regulation, or statutory disclosure obligations that now govern broker conduct in most commercial contexts. Researchers using these dictionaries as primary interpretive tools for twentieth- or twenty-first-century brokerage disputes should supplement them with relevant statutory and regulatory sources.
Webster's 1913 aligns with the legal dictionaries of the same era, confirming that the common and legal meanings were largely coextensive at that time.
Jurisdictional Note
Brokerage law diverges most sharply by context and jurisdiction in real estate and securities. Real estate brokerage is state-regulated, with significant variation in licensing requirements, mandatory written agreement rules, and the conditions under which a broker's fee is deemed earned. Securities brokerage is primarily federal in the United States, governed by the Securities Exchange Act of 1934 and FINRA rules, though state law continues to supply contract and agency principles for fee disputes not covered by federal regulation.