Adapted in part from the excellent source sheet by Rabbi Daniel Rosenfelt, "Mechirat Chametz - Let's Be Honest: Is This Really Legitimate?" <https://www.sefaria.org/sheets/63304.6?lang=bi&with=all&lang2=bi>
(יט) שִׁבְעַ֣ת יָמִ֔ים שְׂאֹ֕ר לֹ֥א יִמָּצֵ֖א בְּבָתֵּיכֶ֑ם כִּ֣י ׀ כׇּל־אֹכֵ֣ל מַחְמֶ֗צֶת וְנִכְרְתָ֞ה הַנֶּ֤פֶשׁ הַהִוא֙ מֵעֲדַ֣ת יִשְׂרָאֵ֔ל בַּגֵּ֖ר וּבְאֶזְרַ֥ח הָאָֽרֶץ׃
(19) No leaven shall be found in your houses for seven days. For whoever eats what is leavened, that person—whether a stranger or a citizen of the country—shall be cut off from the community of Israel.
מַתְנִי׳ כׇּל שָׁעָה שֶׁמּוּתָּר לֶאֱכוֹל, מַאֲכִיל לַבְּהֵמָה לַחַיָּה וְלָעוֹפוֹת, וּמוֹכֵר לַנׇּכְרִי, וּמוּתָּר בַּהֲנָאָתוֹ. עָבַר זְמַנּוֹ — אָסוּר בַּהֲנָאָתוֹ, וְלֹא יַסִּיק בּוֹ תַּנּוּר וְכִירַיִם.
MISHNA: For the entire time that it is permitted to eat leavened bread, one may also feed it to their domesticated animals, to non-domesticated animals, and to birds; and one may sell it to a person who is not Jewish; and it is permitted to derive benefit from it. After its time passes, it is prohibited to derive benefit from it, and one may not even light an oven or a stove with leavened bread.
There was a case where a Jew sold his chometz to a non-Jew with the understanding that it would be returned after Pesach. The Tosefta brings a case where the Jew needed to sell his chometz because he was on a ship in the middle of the sea during Pesach, but it seems that it was not done l’chatchila.
THE REQUIREMENT FOR A CONTRACT OF SALE
In the early 1600s, there was a significant change in the Polish-Jewish economy, which affected the Jewish community to a great extent. As a result, many Jews started producing and selling grain alcohols, which caused a new issue for Pesach. Until then, even when chometz was sold for a token payment, the chometz was removed from the Jew’s house until after Pesach. Needless to say, it was not very practical to do this with big warehouses of alcohol, which is meant to be stored for a long time in large quantities.
Following this, the Bach ruled that the chometz could be sold to a non-Jew, even if it never left the premises of the Jew, as long as the Jew also sold the room where the chometz was located. This was a major turning point in the practice of selling chometz and brought another element to the sale – selling through a contract – because some poskim require a contract when selling real estate... The Russian law at that time stated that, unlike the sale of cattle, when alcohol was sold but not handed over right away, a contract was required. Having a contract for the sale of chometz makes the sale a true legal sale.
PAYING FOR THE CHOMETZ
As mentioned, the price that the non-Jew pays for the chometz can even be a token value. This can be an issue when the chometz is of great value; perhaps the non-Jew will refuse to give it back. To tackle this issue, a different approach was taken. The chometz would be sold at or above market value, but the non-Jew would only pay a token amount at the time of the sale and the rest would be placed upon him as a debt. That way, if the non-Jew decided to keep the chometz, he would have to pay the full contracted price."
-Rabbi Kalman Weinfeld, The History of Mechiras Chometz, https://www.ok.org/article/the-history-of-mechiras-chometz/