Non-Negotiable

Non-Negotiable

What is not negotiable?

Non-negotiable refers to the price of a good or security which is firmly established and cannot be adjusted, or of a part of a contract or transaction which is considered to be a requirement by one or both parties involved. In addition, the term may relate to property or a title the ownership of which is not easily transferable from one party to another.

Understanding non-negotiable

An item can be considered non-negotiable if a party involved in a transaction is unwilling to make changes to a condition that has been put in place. It can be the price of a particular good or service, an element of a contract or a financial product that cannot be exchanged or transferred to a new owner, even through secondary markets.

Key points to remember

  • Non-negotiable describes the price of a good or a title which cannot be adjusted, or of a part of a contract which is considered as a requirement by one or both parties concerned.
  • An item can be considered non-negotiable if a party involved in a transaction is unwilling to make changes to a condition that has been put in place.
  • In addition, the term can refer to property or title the ownership of which is not easily transferable from one party to another, such as government savings bonds.

Examples of non-negotiable

Non-negotiable prices

When a asking price is described as non-negotiable, it means that it cannot be negotiated. When a party sets a non-negotiable price, the option to attempt to negotiate has been effectively suppressed by the reluctance of the first party to participate in such a conversation.

For example, an owner may not want to sell their property unless a buyer offers at least $ 250,000. If the person considers that the asking price is not negotiable, an offer of $ 245,000 will be rejected.

Important

A large company like Walmart Inc. (WMT) is less likely to make price concessions than a much smaller retailer, as it can often easily find other customers willing to pay what it wants.

Regarding securities, if an asset is called a registered security, its price cannot be changed. This can apply to savings bonds as they have a nominal or a specified nominal value and cannot be traded at another value.

Non-negotiable contract elements

A contract may involve certain non-negotiable tenants. For example, a job offer may offer the opportunity to negotiate wages, but be rigid on other conditions, such as the number of days an employee can take for vacation leave.

In addition, in the case of leases on rental properties, the amount due as payment can be considered non-negotiable because it is often a fixed price which must be provided by the tenant to the owner.

Non-negotiable financial products

Non-negotiable securities and products are those which cannot be transferred from one party to another. An example of a non-negotiable instrument, also called a non-negotiable instrument, would be a government savings bond. They can only be reimbursed by the owner of the bond and cannot be sold to other parties.

Because they cannot be resold, these products, also called registered or non-transferable securities, are described as illiquid.

Non-negotiable vs negotiable

Negotiable is the opposite of non-negotiable. When a asking price or a contract is considered negotiable, it means that it is not fixed and can be adjusted according to the circumstances. Likewise, instruments of this nature can be exchanged or transferred easily.

For example, a check would be considered a negotiable instrument because it can be presented to a financial institution (FI) in exchange for real money. Funds in physical currency, such as dollar bills, are also considered negotiable instruments because they can be easily exchanged between the parties. Most securities are negotiable, provided that all appropriate legal documents are included.

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