On the track, it usually means that the "seller" lets the horse go to the "buyer," who does not have to start paying for the horse until he wins (or earns money). I guess the seller and buyer can work it out any number of ways, but usually it's "pay when the horse wins."
A price may be predetermined, but no money crosses hands until later.
Barbara's exactly right. The deal is generally that you pay when (if) the horse wins. If s/he never wins for the new owner, they don't pay. It's a good way to encourage someone to take a chance on a horse that has some issues or is off form and that you want off of your feed bill. I'm sure there are some variations on the payment schedule.