diff --git a/TODO.md b/TODO.md
index 4f8403a6..c088882c 100644
--- a/TODO.md
+++ b/TODO.md
@@ -1,14 +1,19 @@
-# TODO
+# TODO - transfer_ownership entrypoint
 
-## Contracts - Fix unchecked arithmetic in maturity calculation in create_commitment
-
-- [ ] Create branch `bug/checked-maturity-arithmetic` (if not already).
-- [x] Update `contracts/escrow/src/lib.rs` to compute `maturity` using `checked_mul` and `checked_add`.
-- [x] Return `InvalidDuration` on overflow.
-- [x] Add tests in `contracts/escrow/src/test.rs` covering overflow inputs for `duration_days` and timestamp.
-- [x] Document behavior in `contracts/README.md`.
-- [x] Add comments on the overflow guard.
-
-- [ ] Run tests / build (requires Rust toolchain / cargo available).
-- [ ] Commit with message like `fix: use checked arithmetic for maturity calculation`.
+- [x] Inspect escrow contract + tests + docs
+- [ ] Implement `transfer_ownership(commitment_id, new_owner)` in `contracts/escrow/src/lib.rs`
+  - [ ] Gate by current owner auth (`c.owner.require_auth()`)
+  - [ ] Allow only `Funded` commitments
+  - [ ] Update `Commitment.owner`
+  - [ ] Maintain `OwnerIndex` for both old + new owners (remove from old, add to new)
+  - [ ] Add internal helper(s) for index de-registration
+  - [ ] Add event + review-oriented comments
+- [ ] Add unit tests in `contracts/escrow/src/test.rs`
+  - [ ] Happy path: funded commitment index updates
+  - [ ] Fails when commitment not funded
+  - [ ] Fails when commitment disputed (still requires funded-only)
+  - [ ] Edge: transfer to self / duplicate handling
+- [ ] Document flow in `contracts/README.md`
+- [ ] Run `cargo test` and ensure coverage meets requirement
+- [ ] Commit changes on branch (feature/transfer-ownership-entrypoint)
 
diff --git a/contracts/README.md b/contracts/README.md
index da223b29..0092de16 100644
--- a/contracts/README.md
+++ b/contracts/README.md
@@ -50,6 +50,20 @@ create_commitment ──► fund_escrow ──► release            (matured: p
                                   └──► dispute ──► resolve_dispute   (admin adjudication)
 ```
 
+### Marketplace transfer flow (secondary trading)
+
+`transfer_ownership(commitment_id, new_owner)` updates ownership for a **funded** commitment.
+
+**Flow**
+1. Marketplace buyer proposes `new_owner`.
+2. The current commitment owner calls `transfer_ownership` and must authorize via `require_auth()`.
+3. The contract verifies the commitment is `Funded` (transfers are blocked for non-funded states).
+4. The contract updates:
+   - `Commitment.owner`
+   - `OwnerIndex` for both `old_owner` and `new_owner`
+5. The commitment is now eligible for subsequent `release` / `refund` / dispute handling under the new owner.
+
+
 ### Public functions
 
 | Function | Description |
@@ -58,6 +72,11 @@ create_commitment ──► fund_escrow ──► release            (matured: p
 | `create_commitment(owner, asset, amount, risk, duration_days, penalty_bps)` | Create an unfunded commitment with explicit penalty; returns its `id`. |
 | `create_commitment_with_default_penalty(owner, asset, amount, risk, duration_days)` | Create an unfunded commitment using the default penalty for the risk profile; returns its `id`. |
 | `fund_escrow(commitment_id)` | Transfer `amount` from owner into the contract (`Created → Funded`). |
+| `transfer_ownership(commitment_id, new_owner)` | Transfer marketplace ownership for secondary trading (`Funded` only). Current owner must authorize and the contract updates both `Commitment.owner` and `OwnerIndex`. |
+| `release(commitment_id, caller)` | Return principal to owner once matured (`Funded → Released`). |
+| `refund(commitment_id)` | Early-exit refund of principal minus `penalty_bps` (`Funded → Refunded`). |
+| `dispute(commitment_id, caller, reason)` | Freeze a funded commitment pending admin resolution. |
+
 | `deposit_yield_pool(admin, amount)` | Admin-only deposit of yield tokens into the contract yield pool. |
 | `get_yield_pool_balance()` | Read the yield pool balance available for matured release payouts. |
 | `release(commitment_id, caller)` | Return principal plus accrued yield to owner once matured (`Funded → Released`). |
diff --git a/contracts/escrow/src/lib.rs b/contracts/escrow/src/lib.rs
index e53897d3..78425abf 100644
--- a/contracts/escrow/src/lib.rs
+++ b/contracts/escrow/src/lib.rs
@@ -744,6 +744,51 @@ impl EscrowContract {
         Self::load(&env, commitment_id)
     }
 
+    /// Transfer marketplace ownership for secondary trading.
+    ///
+    /// Preconditions:
+    /// - Commitment must be in `Funded` state.
+    ///
+    /// Authorization:
+    /// - Current commitment owner must authorize via `require_auth()`.
+    ///
+    /// Effects:
+    /// - Updates `Commitment.owner`.
+    /// - Maintains `OwnerIndex` for both the old owner and the new owner.
+    /// - Emits `transfer_ownership`.
+    pub fn transfer_ownership(env: Env, commitment_id: u64, new_owner: Address) -> Result<(), Error> {
+        Self::require_init(&env)?;
+
+        let mut c = Self::load(&env, commitment_id)?;
+
+        // Authorization: only the current owner can transfer ownership.
+        // NOTE: Must remain tied to the stored commitment owner.
+        c.owner.require_auth();
+
+        // Only allow transfer of funded commitments.
+        if c.status != EscrowStatus::Funded {
+            return Err(Error::InvalidState);
+        }
+
+        let old_owner = c.owner.clone();
+        if old_owner == new_owner {
+            // No-op transfer. Kept explicit to avoid index churn.
+            return Ok(());
+        }
+
+        // Maintain OwnerIndex for both sides.
+        Self::deindex_owner(&env, &old_owner, commitment_id);
+        Self::index_owner(&env, &new_owner, commitment_id);
+
+        c.owner = new_owner.clone();
+        Self::save(&env, &c);
+
+        env.events().publish(
+            (Symbol::new(&env, "transfer_ownership"), old_owner),
+            (commitment_id, new_owner),
+        );
+
+        Ok(())
     /// Return the list of attestation history for a commitment id.
     pub fn get_attestations(env: Env, commitment_id: u64) -> Vec<AttestationRecord> {
         env.storage()
@@ -886,6 +931,30 @@ impl EscrowContract {
             .set(&DataKey::OwnerIndex(owner.clone()), &ids);
     }
 
+    /// Remove `id` from `owner`'s OwnerIndex list.
+    fn deindex_owner(env: &Env, owner: &Address, id: u64) {
+        let mut ids: Vec<u64> = env
+            .storage()
+            .persistent()
+            .get(&DataKey::OwnerIndex(owner.clone()))
+            .unwrap_or_else(|| Vec::new(env));
+
+        // Vec in soroban-sdk is append-only by default; build a new list.
+        let mut i: u32 = 0;
+        let mut out: Vec<u64> = Vec::new(env);
+        while i < ids.len() {
+            let cur = ids.get(i).unwrap();
+            if cur != id {
+                out.push_back(cur);
+            }
+            i += 1;
+        }
+
+        env.storage()
+            .persistent()
+            .set(&DataKey::OwnerIndex(owner.clone()), &out);
+    }
+
     fn yield_pool_balance(env: &Env) -> i128 {
         env.storage()
             .instance()
diff --git a/contracts/escrow/src/test.rs b/contracts/escrow/src/test.rs
index cb5e0e4e..630df571 100644
--- a/contracts/escrow/src/test.rs
+++ b/contracts/escrow/src/test.rs
@@ -408,6 +408,53 @@ fn owner_index_tracks_commitments() {
 }
 
 #[test]
+fn transfer_ownership_updates_commitment_and_indices() {
+    let f = setup();
+    let old_owner = Address::generate(&f.env);
+    let new_owner = Address::generate(&f.env);
+
+    fund_owner(&f, &old_owner, 1_000);
+    let id = f
+        .client
+        .create_commitment(&old_owner, &f.asset, &1_000, &RiskProfile::Safe, &30, &200);
+    f.client.fund_escrow(&id);
+
+    let before_old = f.client.get_owner_commitments(&old_owner);
+    assert_eq!(before_old.len(), 1);
+    assert_eq!(before_old.get(0).unwrap(), id);
+
+    f.client.transfer_ownership(&id, &new_owner);
+
+    let c = f.client.get_commitment(&id);
+    assert_eq!(c.owner, new_owner);
+
+    let after_old = f.client.get_owner_commitments(&old_owner);
+    assert_eq!(after_old.len(), 0);
+
+    let after_new = f.client.get_owner_commitments(&new_owner);
+    assert_eq!(after_new.len(), 1);
+    assert_eq!(after_new.get(0).unwrap(), id);
+}
+
+#[test]
+fn transfer_ownership_rejects_non_funded_commitments() {
+    let f = setup();
+    let old_owner = Address::generate(&f.env);
+    let new_owner = Address::generate(&f.env);
+
+    fund_owner(&f, &old_owner, 1_000);
+    let id = f
+        .client
+        .create_commitment(&old_owner, &f.asset, &1_000, &RiskProfile::Safe, &30, &200);
+    // Intentionally do NOT call fund_escrow; status remains Created.
+
+    let res = f.client.try_transfer_ownership(&id, &new_owner);
+    assert_eq!(res, Err(Ok(Error::InvalidState)));
+}
+
+
+#[test]
+fn create_rejects_duration_seconds_overflow() {
 fn dispute_categorizes_value_mismatch() {
     let f = setup();
     let owner = Address::generate(&f.env);