As you may have garnered from my last two posts on the concept of equity (in the historical sense and in the philosophical sense), there’s a third sense in which we use this term in legal contexts and it is the most widely used of the three.
While this third sense also relates to the historical origins we’ve analyzed in the last two posts, the meaning of the term is no longer linked to a specific institution. Why? Because today in the U.S. only three states have courts of equity: the states of Delaware (Delaware Court of Chancery), Mississippi (Chancery Court), and Tennessee (Chancery Courts of Tennessee). Ergo understanding the concept of equity from its historical origin alone gives us an incomplete picture of how the term is used in the modern sense.
To bring things into focus, let’s take a step back and understand equity as what developed in the Courts of Chancery throughout history, with its, “distinctive mode of reasoning [… i.e.] case-specificity, discretion, flexibility, moral reasoning, and resistance to fraud, exploitation, and the abuse of legal rights,” but with a modern twist, “as doctrines and remedies” that survive to this day. In that sense, “[e]quity is […] a body of law, in the sense of binding legal rules” (Bray 2016).
Let’s break it down.
Way back when many jurisdictions had courts of equity in the U.S., courts of equity and law had their own individual rules of procedure. These rules governed both how cases were filed and what evidence was admissible. Some suits were brought before equity courts specifically because the chancellor had developed special rules for them. These suits typically involved trusts and mortgages. Other suits could be brought either at law or in equity, such as suits to enforce contracts. But law and equity would apply different rules and give different remedies. For example, courts of law typically enforced contracts with damages, while courts of equity typically gave specific performance.
That’s changed quite a bit in modern times because courts of equity were merged with courts of law and that merger of courts meant some merger of the rules, but very little merger with respect to remedies. Courts to this day continue to classify some remedies as legal and other as equitable. And when a plaintiff seeks equitable remedies, courts continue to apply special doctrines, for example:
These are only a few examples and the body of equitable principles and precedents has shrunk over time. According to some scholars what remain are equitable remedies and remedy-related doctrines. So one way of looking at it is that, “there is a body of law (doctrines and remedies) which originated in a particular institution (the Court of Chancery) and the body of law emerged from that institution using a characteristic mode of reasoning (which is how it developed).”
In my next newsletter (on Monday, August 3, 2020), my subscribers will receive a free mini-glossary with over 70 examples of equity-related terms (and for those who work in my same language pair that mini-glossary will include Spanish translations). Sign up here if you haven’t done so already, because I don’t want you to miss a thing.
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Bray, Samuel L. 2016. "A Student's Guide to the Meaning of "Equity"." OSF. July 20. Accessed July 2, 2020. https://osf.io/sabev/.
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