what are some examples of non arm s length transactions 
to illustrate consider the case of a mother who wishes to sell her car to her son she might choose to give her son a discount on the car even though she could obtain a higher price if she sold it to an arms length buyer in this scenario the transaction is not arm s length because the buyer and seller are already associated as family members although this example is benign other examples could be more harmful for instance if the founder of a publicly traded company engages in nepotism by appointing one of their family members to an important position within the company even though other more qualified candidates were available this decision could harm the company s shareholders the bottom lineevery buyer and seller wants to get the best price possible for their financial transactions one of the best ways to do so is to conduct an arm s length transaction being at arm s length means there are no personal factors that influence the price and the decision to either accept or reject an offer those who execute non arm s length transactions may not get the best price which can also affect the overall market and lending decisions 