PRINCIPLES OF COMMON LAW US CONTRACT LAW
Arm's length principle
A fundamental requirement of contract law. It sets out the condition that the parties to a transaction be independent and on an equal footing.
Such a transaction is known as an "arm's-length transaction". In an arm's length agreement the price, requirements, and other conditions will be presumed to be fair and real and not subject to the scrutiny as the agreement between parties who are not independant and have special relationships.
It is used to assess prices in tax law which requires that the transactions between firms be made purely on a commercial basis both firms negogiating "at arm's length" in ordre to obtain the best deal which can be bargained , and neither firm accommodating or favoring the other in any way
The principle is often invoked to avoid undue government influence over other bodies, such as the legal system , the press, or the arts