Zone Of Possible Agreement

AAA

DEFINITION of 'Zone Of Possible Agreement'

Not a physical place, the zone of possible agreement is considered an area where two or more negotiating parties may find common ground. It is this area where parties will often compromise and strike a deal.

INVESTOPEDIA EXPLAINS 'Zone Of Possible Agreement'

In order for negotiating parties to find a settlement or reach an agreement they must work towards a common goal and seek an area that incorporates at least some of each party's ideas. This area of compromise is considered the zone of possible agreement.

RELATED TERMS
  1. Tender

    To invite bids for a project, or to accept a formal offer such ...
  2. Transaction

    1. An agreement between a buyer and a seller to exchange goods, ...
  3. Sweetheart Deal

    A merger, a sale or an agreement in which one party in the deal ...
  4. Negotiated Sale

    A method of offering municipal bonds or similar financial instruments ...
  5. Friendly Takeover

    A situation in which a target company's management and board ...
  6. Acquisition

    A corporate action in which a company buys most, if not all, ...
Related Articles
  1. Mergers And Acquisitions: Understanding ...
    Fundamental Analysis

    Mergers And Acquisitions: Understanding ...

  2. The Basics Of Mergers And Acquisitions
    Options & Futures

    The Basics Of Mergers And Acquisitions

  3. Easy Ways To Cut Rental Costs
    Options & Futures

    Easy Ways To Cut Rental Costs

  4. What is an alienation clause?
    Investing

    What is an alienation clause?

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center