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Concession: Definition, Example and Related Terms

What is a Concession ?

A concession is a kind of agreement in a negotiation where one party agrees to give up a point or allow a benefit to the other party in order to reach a compromise. It's like giving a little to get a little. For example, in a commercial contract, a company might agree to a lower price, faster delivery, or extra features in order to secure a deal. The company giving the concession is often looking to maintain a good relationship, to get something more valuable in return, or because they see a strategic advantage in doing so. Concessions are a normal part of business negotiations and can lead to more balanced and beneficial agreements for all parties involved.


  • Scenario Description
    A company is negotiating a contract with a supplier. The supplier wants to increase the price by 10%, but the company doesn't want to pay more. The company could offer a concession. They might agree to the price increase if the supplier can deliver the goods faster or add some extra features. This is a concession because the company is giving up something (paying a higher price) in order to get something else (faster delivery or extra features).
    A business is discussing a partnership with another business. They can't agree on how to split the profits. One business might offer a concession. They could agree to a lower profit split if they get more control over the partnership's decisions. This is a concession because the business is giving up something (a higher profit split) in order to get something else (more control).