Exchange - Definition - Law Dictionary Home Dictionary Definition exchange

Definition :

Exchange, a contract of sale denotes a transfer of property in goods by mutual consent. Such a transfer of ownership must be in relation to transfer from one person to another. The consideration would be a price in the form of money. Only when the consideration for transfer consists of other goods it may be an exchange or barter, Dhampur Sugar Mills Ltd. v. Commissioner of Trade Tax, (2006) 5 SCC 624: (2006) 11 JT 111: (2006) 5 SCALE 595: (2006) 5 Supreme 73: (2006) 4 SLT 189: (2006) 7 SCJ 60: (2006) 6 SCJD 106: (2006) 147 STC 57.

Exchange, often contracted into change, a building or other place in considerable trading cities, where merchants, agents, bankers, brokers, and other persons concerned in commerce, meet at certain times to confer and treat together of matters relating to exchanges, remittances, payments, adventures, assurances, freights, and other mercantile negotiations, both by sea and land.

Also used to designate that species of mercantile transactions by which the debts of individuals residing at a distance from their creditors are satisfied without the transmission of actual money. Also the value of the currency of one country in the terms of another.

Par of Exchange. The par of the currency of any two countries meant, among merchants, the equival-ency of a certain amount of the currency of the one in the currency of the other, supposing the currencies of both to be of the precise weight and purity fixed by their respective mints. It now may be assumed to mean the hypothetical equivalent in terms of the currency of any country of a definite amount of gold or other commodity, subject to statutory direction.

Circumstances which determine the course of exchange. The exchange is affected, or made to diverge from par, by circumstances among which may be mentioned first, any discrepancy between the actual weight and fineness of the coins, or of the bullion for which the substitutes used in their place will exchange, and their weight or fineness, as fixed by the mint regulations; and, secondly, any sudden increase or diminution of the bills drawn in one country upon another, See McCull. Com. Dict.

An 'exchange' involves the transfer of property by one person to another and reciprocally, the transfer of property by that other to the first person. There must be a mutual transfer of ownership of one thing for the ownership of another, C.I.T. v. Rasiklal Maneklal (H.U.F.), AIR 1989 SC 1333 (1335): (1989) 2 SCC 454. (Income-tax Act, 1961, s. 45)

The act of transferring interest each in consideration for the other, Black's Law Dictionary, 7th Edn.