Every contract needs two acts of consent. One person gives something up. The other accepts it.

In a gift, each side takes only one of these roles. One only gives, the other only takes. The grandmother gives her grandson a watch. She gives, he receives. This is a formal contract. It has the form of a contract, but only half the content.

In an exchange, it is different. Each gives and each gets. Each does both at once. So each remains an owner, even while giving something up. This is a real contract. In it, contract becomes fully real.

Summary: In a gift, one gives and the other takes. In an exchange, each does both. Only the exchange is a complete contract.