What is an arms length transaction?

Posted on Friday, February 5th, 2010 at 6:47 am    

An arm length transaction is a transaction in which two parties exchange goods, services, or cash in a competitive market. This means that both parties must be acting in their own self interests.

Arms length transactions are often the subject of legal disputes when transactions are made between related parties. These related parties include transactions between family members and transactions between corporations and corporations’ owners. In many cases, related transactions do not meet the standard of arms length because one party may be serving the interest of the other party.

If you or anyone you know has questions about business transactions, contact the Des Moines business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600.

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