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Simple English definitions for legal terms
Market Value
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A quick definition of Market Value:
Market Value: The fair price or value that something can be sold for in the marketplace. This is often used when talking about selling property or services. If the government takes someone's property, they have to pay them the fair market value as compensation. This is different from fair value, which is the value of something when there is no market for it.
A more thorough explanation:
Definition: Market value refers to the objective fair price or value that can be obtained for a good through a transaction in the marketplace. This term is commonly used in the context of property or services being sold, and is often synonymous with fair market value. When the government takes property, it must provide just compensation, which is typically the fair market value of the property.
Example: If you are selling your car, the market value would be the price that a buyer is willing to pay for it in an arm's-length transaction. This price would be based on factors such as the car's age, condition, and demand in the market.
Example: In property law, if the government takes your land for public use, they must provide just compensation, which is typically the fair market value of the land. This means that the government must pay you the amount that a willing buyer would pay for the land in an arm's-length transaction.
Market value is an important concept in determining the worth of goods and services in the marketplace. It helps ensure that buyers and sellers are able to make fair transactions based on objective pricing.