The concept of an arm's length transaction commonly comes into play in the real estate market. When determining the fair market value of a piece of property, the price for the property must be obtained through a potential buyer and seller operating through an arm's length transaction, otherwise, the agreed-upon price will likely differ from the actual fair market value of the property.
For example, if two strangers are involved in the sale and purchase of a house, it is likely that the final agreed-upon price will be close to market value (assuming that both parties have equal bargaining power and equal information about the situation). This is because the seller would want a price that is as high as possible and the buyer would want a price that is as low as possible.
This contrasts with a situation in which the two parties are not strangers. For example, it is unlikely that the same transaction involving a father and his son would yield the same result, because the father may choose to give his son a discount.
ринкова угода; угода без зацікавленості (юр.); комерційна угода; угода на ринкових засадах; угода між партнерами, не зацікавленими у її реалізації; угода між партнерами, які не мають неринкової зацікавленості в її реалізації; угода між незалежними партнерами (на відміну від угод у внутрішньокорпоративній торгівлі); угода на суто комерційних засадах