Question

Following is not true about the sale and exchange:

• A. A transfer of property by exchange can be made in the same manner as is applicable to sale.
• B. Exchange is a natural incident of property, there is no need to enter into a contract for that purpose.
• C. Money may be added to anything which is exchanged to equalise the values of properties in exchange.
• D. Each party has similar rights and liabilities as that of a seller and a buyer.

Hint:

Exchange follows the sale formalities; rights/liabilities of parties mirror seller–buyer.

Answer 1

The Correct Option is B

Step 1: What the Transfer of Property Act says.
- S.118 TPA: Exchange = mutual transfer of ownership of one thing for ownership of another.
- S.118 (para 2): “A transfer of property in completion of an exchange can be made only in the manner provided for the transfer of such property by sale.” ⇒ (a) is true.
- S.119–120: Rights and liabilities of parties to an exchange are the same as those of seller and buyer ⇒ (d) is true.
Step 2: Money with exchange.
Adding money (owelty) to equalise values does not convert the transaction into a sale; it can still be an exchange ⇒ (c) is true.
Step 3: Identify the incorrect statement.
(b) is false — exchange is not a “natural incident” that happens without agreement; it is effected by contractual transfer like a sale.
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