Arm's length principle
The arm's length principle (ALP) is the condition or the fact that the parties to a transaction are independent and on an equal footing. Such a transaction is known as an "arm's-length transaction". It is used specifically in contract law to arrange an equitable agreement that will stand up to legal scrutiny, even though the parties may have shared interests (e.g., employer-employee) or are too closely related to be seen as completely independent (e.g., the parties have familial ties).
Examples
A simple example of not at arm's length is the sale of real property from parents to children. The parents might wish to sell the property to their children at a price below market value, but such a transaction might later be classified by a court as a gift rather than a bona fide sale, which could have tax and other legal consequences. To avoid such a classification, the parties need to show that the transaction was conducted no differently from how it would have been for an arbitrary third party. This could be done, for example, by hiring a disinterested third party, such as an appraiser or broker, who could offer a professional opinion that the sale price is appropriate and reflects the true value of the property.
At Arms Length
The tears, the crying, this world is dying,
and all I can picture is black.
The lack, the sorrow, denuding the morrow,
somehow it always comes back.
The distance, I'm further away from you now,
drifting apart from my world.
This venture I've started, rejecting it all,
I'll never let go of my word.
Clinging to fragments, pieces and segments,
never have I been alone.
You've always been there, feeding my strength,
always been there, at arms length,
always been there, feeding my strength...
What I've become, the person I am,
stands taller than most of you all,
the goals I set out to achieve in this world,
I've faced them now, both big and small.
The tears, the crying, please stop your lying,
and skip all your empty promises.
The lack, the sorrow, denuding our morrow,
but somehow, it cannot get darker than this.