The sales contract between father and son was not considered an arm’s length transaction since the parties were closely related to each other.
arm's length
Definition
Of or relating to transactions between two parties who are independent and do not have a close relationship with each other. Presumably, these parties have equal bargaining power and are not subject to undue pressure or influence from the other party. Transactions of this nature do not give rise fiduciary duties between the parties.
Definition from Nolo’s Plain-English Law Dictionary
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 is relevant for determining whether an agreement was freely entered into, and the price, terms, and other conditions were fair. For example, if a man sells property to his son the price paid may not be the true value since it may not have been an "arm's length" transaction.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:11 pm
“A treaty, including one between the United States and an Indian tribe, is essentially a contract between two sovereign nations. When the signatory nations have not been at war and neither is the vanquished, it is reasonable to assume that they negotiated as equals at arm’s length. There is no reason to doubt that this assumption applies to the treaties at issue here.” J. Stevens, Washington v. Washington State Commercial Passenger Fishing Vessel, 443 U.S. 653, 675 (1979).
