The Transfer of Property Act, 1882 provides that the transaction, where two persons mutually transfer the ownership of one thing for the ownership of another is called exchange. Either the things or both of these things may be movable or immovable. In case of sale, the price is paid in money while in an exchange one specific property is transferred for another. The mode of transfer in the case of exchange is the same as in the case of sale. Each party to an exchange has the rights and is subject to liabilities of a seller as to that which he gives and also, has the rights and subject to liabilities of a buyer as to that which he takes. Where one of the parties to an exchange loses the whole or part of the property received in exchange, due to any defect of title in the person who gave it, he may either claim that his property shall be returned to him or he may ask for compensation for the loss suffered by him. If the aggrieved party claims to get his property back, he can sue the other party if he is still in the possession of that thing. On an exchange of money, each party is deemed to endorse the genuineness of the money given by him.
