Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Non-Negotiable

What it is:

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 it works (Example):

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 it Matters:

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.