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.

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