For instance, when two strangers are parties to a real estate transaction, the seller wants to charge the highest possible price for that property, and the buyer wants to pay the lowest possible price for that property. This also reassures any potential third parties to the transaction that no collusion exists between the buyer and the seller.Īrm’s length transactions must be conducted in real estate transactions to ensure that the price being offered for the property is consistent with the fair market value for that property. Arm’s length transactions ensure that each party is acting in his own self-interest, and that neither party is being pressured by the other party to go ahead with the transaction. Arm’s Length TransactionĪrm’s length transactions are transactions wherein the buyers and sellers to the transaction have no prior relationship with each other. The arm’s length principle here ensures that the employer and the employee each have an unbiased and qualified advocate on his side.
This is done to protect the employer from any lawsuits that the employee may be able to bring upon being terminated, should he be terminated in a way that deviates from the labor laws within that jurisdiction.
While the employer and the employee do have a prior relationship with each other, the termination itself is conducted by a neutral third party who is not a party to that relationship. The arm’s length principle also helps guide transactions insofar as appropriate taxation is concerned.Īn example of the arm’s length principle at work involves a supervisor’s use of the company’s human resources department to fire an employee. In consideration of the arm’s length principle, parties are considered independent of each other when they are not related to each other in the familial sense, nor have they engaged in any prior deals with each other, and have no side deals with each other. Send us feedback about these examples.The arm’s length principle is a condition in which the parties to a transaction have no prior relationship with each other, and that they are equal parties to the transaction. These examples are programmatically compiled from various online sources to illustrate current usage of the word 'arm's length.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Jim Owczarski, Journal Sentinel, 7 Mar. 2023 Carter has been a consistent three-point shooter, but of late his triples have often come at times that swing momentum and this pair helped the Bucks keep the Magic at arm's length and set up a victory. 2022 The entire powertrain is mounted on a subframe, and hydraulically damped engine mounts keep noise and vibration at arm's length. Editors, USA TODAY, 19 July 2022 And Biden may travel to Saudi Arabia, a critical leader in oil production, this year after keeping Crown Prince Mohammed bin Salman at arm's length after the kingdom was accused of murdering and dismembering Washington Post columnist Jamal Khashoggi in 2018. 2023 During his tenure, Hogan kept an arm's length from Donald Trump and has sometimes criticized the former president. 2023 Xavier kept the Friars an arm's length away all night in front of arguably the most hostile crowd Xavier's seen all season.
2023 True, the power transfer spans just an arm's length rather than kilometers, as Nicola Tesla envisioned a century ago in his pioneering work. Emily Deletter, USA TODAY, 30 June 2023 Kentucky kept their Buckeye counterparts at arm's length the rest of the way, never letting the lead get smaller than nine. Recent Examples on the Web The American Pyrotechnics Association recommends to never light or hold more than one sparkler at a time, and to keep them at an arm's length away from the body.
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