Arm's length | CLIK

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Arm's length

Arm's length is the description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as:

  • being a relative,
  • having another deal on the side, or
  • one party having complete control of the other.

It becomes important to determine if an agreement was freely entered into to show that the price, requirements, and other conditions were fair and genuine.

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