In what kind of transfer of property, the right and liabilities of the parties to exchange shall be that of the rights and liabilities of the buyer to the extent of receiving and that of the seller to the extent of giving.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Exchange
Exchange refers to a transaction where two parties transfer ownership of property to each other. In an exchange, the rights and liabilities of the parties involved are based on what they are giving and receiving from each other.
In contrast:
- Gift involves the transfer of property without any consideration (payment) and typically does not involve mutual rights and liabilities.
- Lease refers to the transfer of the right to use and enjoy property for a specified period, involving obligations for both the lessor and lessee, but not in the same manner as an exchange.
- Mortgage is a transfer of interest in property as security for a loan, where the rights and liabilities are specific to the borrower and lender.