Arm's Length Transaction

(redirected from Arms-Length Transactions)

Arm's Length Transaction

A transaction in which the buyer and the seller have no significant, prior relationship. In an arm's length transaction, neither party has an incentive to act against his/her own interest. That is, the seller seeks to make the price as high as he/she can, and likewise the buyer seeks to make it as low as he/she can. The negotiations for an arm's length transaction result in the arm's length price, which is almost always close to the market value of the asset being sold. The term is often used in real estate transactions because family members often sell property to each other at something other than the arm's length price.
References in periodicals archive ?
Under terms of their EDGAR subcontracts, both companies must purchase the electronic data in arms-length transactions at the same prices available to all other users.
Greenlight wonders whether these fees are arms-length transactions for competitive services at competitive prices, as few non-controlled companies engage Allied on similar terms.
Under terms of its EDGAR subcontract, Mead Data Central must purchase electronic SEC data services for its own commercial use in arms-length transactions at the same prices available to all other subscribers.
It allows for arms-length transactions between business units, now mandated by legislation; brings clarity to the opportunities for each business in the new competitive energy environment, and allows the market to value the Company's individual business units on a stand-alone basis.
Although Maxwell maintains a nominal 3 to 6 percent interest in the property, the company is currently participating in two separate arms-length transactions with industry partners that will further enhance and expand its working interest in select producing wells in this area.