What is Non-Negotiable?
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.