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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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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