Arm's Length Transaction

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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 ?
This investment is an independent arms-length transaction based on the fair market valuation of the land and other assets of the Company and the future business potential in the airports and related infrastructure sector," he further said.
M2 EQUITYBITES-July 2, 2018-Ring the Bell Capital Enters Arms-Length Transaction with Beadell Resources
Under a separate, arms-length transaction, Dow and Olin agreed to a 20-year long-term capacity rights agreement for the supply of ethylene by Dow to Olin, in which Dow will receive up-front payments and, in return, Olin will receive ethylene at co-investor, integrated producer economics.
As a result, the retailer-supplier relationship is changing from an arms-length transaction based on product price and features to one based more on trust, familiarity and the creation of systems to promote ongoing improvement and thus reduce risk for both parties.
This means they must be what you would reasonably expect to see in an arms-length transaction between unrelated parties.
The protections of this law apply only to "bona fide" tenants, e.g., those who have a contract; those whose lease was the result of an arms-length transaction; and the rent for the property is not substantially less than the fair market rent.
"On the face of it, this does not appear to be a commercial, arms-length transaction. It looks like a purchase on very favourable terms so that it could be in effect a concealed donation," he said.
An owner is permitted to object to the proposed sale on several grounds including a claim that the price is too high or that the proposed sale is not a bona fide arms-length transaction. In a recent case before the New York City Loft Board, the agency ruled, for the first time, that a proposed fixture sale should be rejected based upon a finding that the sale did not constitute a bona fide arms-length transaction.
So long as the owner makes it clear that there is a loss factor and couples this notice to the tenant with an opportunity for the prospective lessee to inspect the premises and take measurements to verify the amount of space being rented, the bargain between the parties will be deemed to be an arms-length transaction which will prevent the tenant from having any claim demand that the lease be rewritten at subsequent period of time.
In a regulatory filing last night, Alteryx noted that PwC has purchased the company's products and services from time to time in the ordinary course of business in arms-length transactions. The company's sales to PwC have been immaterial to date, including in 2018.
Will more people purchase and service their own policies online as arms-length transactions, thus eliminating the need for us middlemen?
The index, based on all arms-length transactions, tracks data of 15,000 "neighborhoods," which is rolled-up to report on the changes in 360 counties, nine census divisions, four regions and the nation overall.