What Is Non-Negotiable?

Non-negotiable refers to the price of a good or security that is firmly established and cannot be adjusted, or a part of a contract or deal that is considered a requirement by one or both involved parties. Additionally, the term can relate to a good or security whose ownership is not easily transferable from one party to another.

Understanding Non-Negotiable

An item can be considered non-negotiable if one party involved in a transaction is not willing to make any changes to a condition that has been set in place. This can refer to the price for a particular good or service, an element within a contract, or a financial product that cannot be exchanged or transferred to a new owner, even through the use of secondary markets.

Key Takeaways

  • Non-negotiable describes the price of a good or security that cannot be adjusted, or a part of a contract that is considered a requirement by one or both involved parties. 
  • An item can be deemed non-negotiable if one party involved in a transaction is not willing to make any changes to a condition that has been set in place.
  • Additionally, the term can relate to a good or security whose ownership is not easily transferable from one party to another, such as government savings bonds.

Examples of Non-Negotiable

Non-Negotiable Prices

When an asking price is described as non-negotiable, it means it is not possible to haggle over it. When one party sets a non-negotiable price, the option to attempt to negotiate has been effectively removed by the first party’s unwillingness to participate in such a conversation.

For example, a homeowner may be unwilling to sell his or her property unless a buyer offers at least $250,000. If the individual deems the asking price to be non-negotiable, a bid of $245,000 will be rejected.

Important

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

In regards to securities, if an asset is referred to as a registered security, its price cannot be changed. This can apply to savings bonds as they have a specified face value, or par, and cannot be negotiated to any other value.

Non-Negotiable Contract Elements

A contract may involve certain non-negotiable tenants. For example, a job offer might offer scope to negotiate on salary, but be rigid about other terms, such as the number of days that an employee can take for annual leave.

Moreover, in the cases of leases on rental properties, the amount due as payment may be considered non-negotiable as it is often a fixed price that must be provided by the tenant to the property owner.

Non-Negotiable Financial Products

Non-negotiable securities and products are those that cannot be transferred from one party to the next. An example of a non-negotiable instrument, also referred to as a non-marketable instrument, would be a government savings bond. They can only be redeemed by the owner of the bond and are not allowed to be sold to other parties.

Because they cannot be sold on, these products, also known as registered securities or non-transferable securities, are described as illiquid.

Non-Negotiable vs. Negotiable

Negotiable is the opposite of non-negotiable. When an asking price or contract is referred to as negotiable it means that it is not set in stone and can be adjusted depending on the circumstance. Likewise, instruments of this nature can be exchanged or transferred with ease.

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