Key Takeaways

  • Equity law provides remedies that go beyond monetary damages, offering solutions like injunctions or specific performance.
  • Examples of equity law include disputes involving contracts, trusts, property, and family law matters.
  • Equity vs. common law lies primarily in the type of relief: equitable remedies are non-monetary and judge-determined.
  • Maxims of equity, such as “He who comes into equity must come with clean hands,” still guide decisions in equitable cases today.
  • Federal courts merged law and equity in 1938, but the principles of equity continue to shape judicial remedies and fairness-based relief.
  • Readers can find experienced legal assistance for equity law issues through UpCounsel’s attorney network.

A Guide to Equity Law

Equity law is derived from old English common law, when courts used their discretion to apply justice in accordance with natural law. Equity law supersedes common law and statute law when there is a conflict between the two and neither can appropriately bring the correct verdict.

Equity law came in response to the rigid procedures of England’s legal courts. Frustrated plaintiffs turned to the King when they could not get the outcome needed to continue living. The King then formed the Court of Chancery to deal with the law of Equity.

In modern practice, the biggest distinction between law and equity is the remedies each offers. In a civil lawsuit the court will award monetary damages, however, equity was formed when monetary damages could not adequately deal with the loss. An example of this is if someone is infringing on a trademark of yours, you can get monetary damages for the loss, but your business could be ruined if they continue. Equity is the additional solution that allows a court to tell another person to stop doing something via an injunction, among other things.

Another distinction is that the judge is the sole decision-maker when it comes to equity. In the United States today, the federal courts and most state courts have combined the common law and equity law into a court of general jurisdiction. Courts of equity were highly questionable when they existed as many people distrusted the obscure judge-made rule. Generally, equity law goes against the institution of law in that it is not predictable by being based on past precedent.

The federal courts got rid of law/equity separation with the adoption of the Federal Rules of Civil Procedure in 1938. Today, only three states still have separate courts for law and equity. Delaware still obtains a Court of Chancery and is a main reason for the incorporation practices there. The Court of Chancery usually handles corporate law, trusts, wills, probate, marriages and divorces.

Finding an attorney who knows the history of Equity law, where it is still used and applied are all things that will help in any area of law to determine what equitable relief can be obtained.

Historical Jurisdiction and Modern Relevance

Equity law’s origin in England’s Court of Chancery created a system distinct from the rigid procedures of common law. In the U.S., the Federal Rules of Civil Procedure of 1938 merged equity and legal courts, but distinctions persist in:

  • Delaware, which maintains a separate Court of Chancery handling corporate, trust, and fiduciary matters.
  • Certain family and probate cases, where equitable remedies are particularly suited to emotional or interpersonal disputes.
  • Trust and fiduciary litigation, where remedies often involve constructive trusts or restitution rather than damages.

Even in unified court systems, judges often invoke equitable doctrines when fairness requires a tailored resolution.

Maxims of Equity

Equity operates under long-established principles known as the maxims of equity, which guide judicial discretion. Key examples include:

  • "Equity will not suffer a wrong without a remedy" – If harm has occurred, equity seeks to provide a solution.
  • "He who seeks equity must do equity" – A party requesting equitable relief must act fairly.
  • "He who comes into equity must come with clean hands" – A court may deny relief to parties acting unethically.
  • "Equity follows the law" – Equitable relief supplements but does not override existing law unless necessary for justice.
  • "Delay defeats equity" – Undue delay in seeking a remedy may bar relief.

Understanding these principles helps clarify when and how equitable relief may be granted.

Key Differences Between Law and Equity

While both legal and equitable courts resolve disputes, they differ significantly in:

  • Nature of remedy: Legal courts provide monetary relief; equity courts issue orders like injunctions, declaratory judgments, and specific performance.
  • Decision-maker: Legal cases may involve juries, while equitable decisions are solely judge-driven.
  • Precedent and flexibility: Legal courts adhere strictly to precedent. Equity courts use discretion to ensure fair outcomes, especially when unique circumstances arise.

Historically, someone could be right in law but wrong in equity. Today’s blended courts still honor these differences when fashioning appropriate remedies.

Equity Law in Action: Real-World Examples

Equity law plays a pivotal role in civil litigation, particularly when legal remedies like monetary damages fall short. Common equity law examples include:

  • Injunctions in intellectual property disputes: A business owner may seek an injunction to prevent a competitor from using a trademark that causes confusion in the marketplace.
  • Specific performance in real estate contracts: If a seller backs out of a real estate transaction, the buyer might ask the court to compel the sale rather than accept monetary damages.
  • Constructive trusts: When one party wrongfully holds property that belongs to another, a court may impose a constructive trust to return the property to its rightful owner.
  • Equitable estoppel: A person may be prevented from going back on a promise if another relied on it to their detriment, even without a formal contract.
  • Family law matters: Courts may issue equitable orders in custody or divorce proceedings where fairness overrides strict legal entitlement.

These equity law examples show how courts apply fairness-based remedies to uphold justice when standard legal paths are insufficient.

Frequently Asked Questions

1. What is the difference between equity law and common law? Equity law provides remedies based on fairness, like injunctions or specific performance, while common law typically offers monetary damages.

2. Can a case involve both legal and equitable claims? Yes. A lawsuit may seek both monetary compensation and an equitable remedy, such as a restraining order or specific performance.

3. Are equitable remedies available in every state? Yes, though most states have unified court systems, equitable remedies are still accessible through the same courts handling legal matters.

4. What are some common equity law examples in business law? Examples include injunctions against trademark infringement, disputes over shareholder rights, and enforcement of non-compete agreements.

5. How do courts decide whether to grant equitable relief? Courts consider factors like the inadequacy of legal remedies, the fairness of both parties' actions, and whether there’s undue delay in seeking relief.

If you need help with understanding equity law, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.