In cases where a connection or network is established between computers, the sender, the receiver and the subnet conduct a negotiation about parameters to be used. Parameters like maximum size of the message, quality of service etc are considered. One side can make a proposal and the other can accept it, reject it or make a counter proposal. Negotiation has to do with getting both sides to agree on parameters or values to be used during the communication.
Maximum packet size is one example.
Maximum packet size is one example.