Exchange is defined under Section 118 of the Transfer of Property Act, 1882 as the mutual transfer of ownership of one thing for the ownership of another by two persons. The key characteristics of an exchange are the transfer of exclusive ownership between parties, which can include both movable and immovable properties, as well as money. An exchange deed outlines the details of the transaction such as the parties, property descriptions, terms, and execution.

1. EXCHANGE
According to Transfer of Property Act,
1882
Submitted By:
Name: Nagesh Sawant
Enrolment No.:16BSP1456
Course: Legal environment of Business
Semester - III
Section: K
College:ICFAI Business School,Powai,Mumbai

2. What is meant by
EXCHANGE?
• Exchange according to Transfer of Property act,
1882.
• Section 118 of the Transfer of Property Act defines
“exchange” as follows:
“When two persons, mutually transfer the ownership of
one thing in exchange for the ownership of another,
neither thing or, both things being money only, such a
transaction is called an “exchange.”

3. CHARACTERISTIC
FEATURES OF EXCHANGE
• Transfer of ownership: The ownership of one party must
be exclusive of the ownership of the other.
• Properties can be movable: The definition of exchange
is not limited to immovable property.
• Exchange includes Barter: Exchange is not only
exchange of lands but Barter of Goods.
• Mode of transfer: Money in one form may be exchanged
for money in another form.

4. Terms related to EXCHANGE under Transfer of
Property Act, 1882
• Right of party deprived of thing received in exchange:
If any party to an exchange or any person claiming
through or under such party is by reason of any defect in
the title of the other party deprived of the thing or any
part of the thing received by him in exchange, then,
unless a contrary intention appears from the terms of the
exchange.
• Rights and liabilities of parties: Save as otherwise
provided in this Chapter, each party has the rights and is
subject to the liabilities of a seller as to that which he
gives, and has the rights and is subject to the liabilities of
a buyer as to that which he takes.
• Exchange of money: On an exchange of money, each
party thereby warrants the genuineness of the money
given by him.

5. Example of EXCHANGE
A BTRANSFERS A HOUSE
WORTH RS.1500/-
A B
TRANSFERS A FIELD
WORTH RS.1000/- AND
RS.500 CASH/-
SUCH TYPE OF TRANSACTION IS TERMED AS “EXCHANGE”

6. WHAT IS A DEED OF
EXCHANGE/EXCHANGE DEED
• Description of deed
• Date of execution
• Parties to deed
• Recitals
• Covenants
• Testimonium
• Testatum
• Operative words
• Parcels
• Completion transaction
• Execution
Contents of Deed of
Exchange

7. Pro forma DEED OF EXCHANGE

11. CONCLUSION
• Where two persons mutually transfer the ownership
for ownership of another, the transaction is known as
exchange.
• As the exchange is involved under the transfer of
property act there are certain rights and liabilities of
the parties arise, and the when money is paid for
equality of exchange, there is no charge for the
money so paid.
• Thus exchange is transfer of one thing for another
thing and both the thing and either of the things may
be movable or immovable.