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arms length is to deal as per norms of markets in vogue. Or covenants just like for third unknown party. No preferential treatment or clause is added to the agreement to oblige or give any favour.
An arm's length transaction is a transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm's length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party.
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An arm's length transaction is one in which parties to the transaction act independently and have no relationship to each other ensuring that all parties in the deal are acting in their own self interest, are not subject to any pressure or duress.
The concept of an arms length transactions is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress.
So an arm's length transactions between related parties is a transaction were the parties to the transaction act independently and in there own self interest and are not subject to any pressure or duress as a result of the relationship between them.
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