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What is negotiable? Definition and meaning

In business, if something is negotiable it can be sold or transferred to another person or entity as a form of payment – it is transferable by endorsement and delivery. A check (UK: cheque) made out to an individual or company is an example of a negotiable instrument, because the person it is written out for could endorse it for payment or transfer it to another person, and the money would go to them.

Other examples of negotiable instruments include banknotes, bills of exchange, demand draft and promissory notes.

The word can also be used for the terms of an agreement or contract – it means that it could be adjusted. For example, if you advertise your car for sale in your local newspaper and say ‘$15,000 negotiable’, it means you would consider offers below that amount.

NegotiableIn business, ‘negotiable’ means that the terms may be negotiated and adjusted. In this case, the sale price of the car could be reduced.

In business and finance, the word ‘negotiable’ can often (not always) be replaced with the terms marketable, unregistered or transferable.

In the financial world, the word typically refers to a legal instrument or document that people and businesses use in lieu of cash. It is used to make a promise of payment – in most cases of cash – either upon demand or at some future date.

Negotiable vs. non-negotiable

Non-negotiable has the opposite meaning. Something or a situation that is non-negotiable is not open for discussion or modification – a non-negotiable instrument cannot be transferred or assigned to the legal ownership of another person or entity.

A non-negotiable price is the final price – nothing less than the amount asked would be considered.

Negotiable instrumentsA negotiable instrument is a document that guarantees the payment of a specified amount of money, either on demand, or at a set time, with the payer named on the document. describes the adjective ‘negotiable’ as follows:

“1. Capable of being negotiated (a negotiable salary demand). 2. (of bills, securities, etc.) Transferable by delivery, with or without endorsement, according to the circumstances, the title passing to the transferee.”

Etymologists (they study the origin of words) say that the adjective ‘negotiable’ was first used in the English language around 1749. The word – negotiate + able – comes from the French négociable (17c). The noun is ‘negotiability’ and the verb ‘to negotiate’.

The verb ‘negotiate’ comes from the Latin negotiate (done in the course of business). The Latin verb is negotiari (to do business) and noun is negotium (business).

Famous quote using ‘negotiable’ – During The Berlin Crisis in 1961, US President John F. Kennedy said in a radio and TV address to the American people: “We cannot negotiate with people who say what’s mine is mine and what’s yours is negotiable.”

During his inaugural address in 1961, President Kennedy said: “Let us never negotiate out of fear. But let us never fear to negotiate.”

‘Negotiable’ in other languages: (Spanish) negociable, (Portuguese) negociável, (French) négociable, (Italian) negoziabile, (German) verhandelbar, (Russian) оборотный, (Japanese) 要相談, Chinese 面议, Arabic قابل للتفاوض.

Video – Meaning of negotiable

This video explains the different meanings of the word negotiable.