DEFINITION of 'Recompense'
The act of awarding a target person, group or entity some form of monetary benefit as a result of the target performing some action or as a result of some action happening to the target. This is one of the main tenets of capitalism, as people perform a task as a result of being paid some sort of relevant incentive.
For example, companies may pay its workers with a special cash bonus as a result of the workers' efforts in contributing to the company's profits. However, a company may have to pay a compensation as a result of an injury that happened to the worker as a result of the company's negligence.
BREAKING DOWN 'Recompense'
Recompense payments award a targeted person, group or entity with some form of monetary benefit as a result of previous actions performed or occurrences of legal loss. Entities often use recompense payments to reward employees for high performance or goals achieved. Court actions also often include required recompense payments for losses from expenses incurred over a specified action or series of tasks.
Recompense payments are one of the main tenets of capitalism, they provide relevant incentive for actions and tasks performed through assurance of due payment. In a capitalist society, these payments can be relied upon because of the standards set by legal frameworks for citizens and businesses.
Recompense Payment Examples
As an example, companies may pay its workers with a special cash bonus as a result of the workers' efforts in contributing to the company's profits. These special cash bonus payments are often contingent upon past performance levels achieved or corporate goals attained during a previously specified period of time.
Recompense payments are also often referred to in worker compensation cases. In worker compensation cases, companies may be required to pay recompense payments as compensation for past injury or harm incurred by an employee as a result of work on the job or the company's negligence.
Companies under business organization often have reserve funds allotted for various types of recompense payments. These funds are typically paid into on a regular basis to allow for appropriate and timely payout of recompense payments or rewards. Payments of recompense are denoted as a liability on corporate balance sheets.
In the case of a legal matter, an individual or entity may be required to make recompense payments as compensation for past damages or losses incurred through the course of a series of events or tasks under judgement in a legal proceeding. Expenses eligible for recompense may occur throughout the duration of a case in legal court. In legal court cases, expenses for recompense are required to be paid in full to the damaged party upon a legal order by the court. Terms of legal recompense payments are typically outlined and awarded based on the court’s legal view of just and adequate compensation for loss or damages.