Non-Negotiable

Written By
Paul Tracy
Updated June 17, 2021

What is Non-Negotiable?

Non-negotiable refers to something that cannot be bought, sold, exchanged or transferred. Non-negotiable also can refer to a term or condition that is not open to negotiation.

How Does Non-Negotiable Work?

Certain securities, contracts and assets cannot be transferred from one party to another. For example, a certificate of deposit (CD) cannot be redeemed by anyone but the account holder. A person cannot sell his or her CD to another person.

When a term or condition is non-negotiable, it means it is not open to alteration. For example, a homeowner may agree to sell his home, provided he receives a minimum of $200,000. If the price is non-negotiable, he will not agree to change the price if a buyer offers $190,000. 
 

Why Does Non-Negotiable Matter?

Because non-negotiable securities can't be transferred, the market for them is typically illiquid.

When referring to a price, it's important to remember that the side with the most power tends to have the least incentive to negotiate. For example, a huge company like Walmart will not haggle with a customer over the price of its merchandise, but a smaller shop owner may be willing to make concessions on the same product.

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