Kentucky Reciprocal Salesperson Practice Test

A legal referral fee is best described as a payment that is contingent on closing. This means that the fee is typically paid after a successful transaction has been completed, such as when a real estate deal closes. The rationale behind this structure is that the referring party provides a service — making the introduction or connecting the client to a service provider — which is only compensated if the introduction leads to a successful outcome.

In this context, the relationship between the referral and the closing emphasizes the principle that the payment is not made just for the act of referring but is tied to the performance and result of the continued transaction. Therefore, it aligns with legal and ethical standards, ensuring that the service rendered yields a tangible outcome before compensation is provided.