non-arm's length transaction
A transaction involving a party
that is controlled by another entity
and does not act on its own behalf. The party sets aside independent interest
in order to focus on the wishes of the controlling
party. Non-arm's length transactions
must involve at least one interested party that is concerned about the possible consequences of the transaction. Transactions involving family members
, and parent companies
would not be considered non-arm's length transactions because the parties
are acting independently. Opposite of
arm's length transaction.
Use this term in a sentence
When companies who have had a previous relationship conduct business they are entering a non-arm's length transaction.
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