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Negotiable: Definition, Example and Related Terms

What is Negotiable ?

In the context of contracts and agreements, "negotiable" refers to anything that can be discussed and modified through negotiation between the involved parties. It encompasses terms, conditions, or elements within a contract that are open to change or adjustment, based on mutual consent. Negotiability embodies flexibility and the willingness to reach an agreement that is satisfactory to all parties.

For example, in business contracts, certain payment terms, delivery schedules, or scope of services may be negotiable, allowing parties to adjust these elements to better align with their interests or capabilities. This capacity to negotiate helps to accommodate changes and evolving needs, making it a critical aspect of contract management.

Beyond the terms in a contract, the term "negotiable" also applies to instruments like checks or promissory notes that can be transferred or assigned to another party, typically in financial or commercial transactions.

Understanding what aspects of a contract are negotiable allows stakeholders to prepare more effectively for contract discussions, maximizing their leverage and ensuring a more favorable outcome.

Example(s)

  • Scenario Description
    A contractor and a client are drafting a construction contract. The timeline for project completion is currently set for 12 months. The timeline is negotiable. The contractor and client may discuss and agree to adjust the timeframe based on factors like project scope, resource availability, or budget constraints.
    A software company is offering a license agreement to a business customer. The initial price for the licensing fee is $10,000 annually. The annual fee could be negotiable. The business customer may negotiate a lower fee or a payment plan that fits their budget, depending on their specific needs and the volume of software licenses they intend to purchase.