Legal Definition of equity
- A branch of English law which developed hundreds of years ago when litigants would go to the King and complain of harsh or inflexible rules of common law which prevented "justice" from prevailing. For example, strict common law rules would not recognize unjust enrichment, which was a legal relief developed by the equity courts. The typical court of equity decision would prevent a person from enforcing a common law court judgment. The kings delegated this special judicial review power over common law court rulings to chancellors. A new branch of law developed known as "equity", with their decisions eventually gaining precedence over those of the common law courts. A whole set of equity law principles were developed based on the predominant "fairness" characteristic of equity such as "equity will not suffer a wrong to be without a remedy" or "he who comes to equity must come with clean hands". Many legal rules, in countries that originated with English law, have equity-based law such as the law of trusts and mortgages.
Definition of equity
Latin 'aequĭtas' was used by Romans with the same meaning as Greek 'ἐπιείκια' which is the virtue of reduce Law's hardship when rigorousness would become unjust (Aristo. Ethics Book V). Aequĭtas was also the name of the fair trade's godness. Ref. Websters dictionary Wikipedia.
- ownership, especially in terms of net monetary value of some business.
- (law) a legal tradition that deals with remedies other than monetary relief, such as injunctions, divorces and similar actions.
- (law) The value of property minus liens or other encumbrances.
- (accounting) the ownership interest in a company as determined by subtracting liabilities from assets.
- justice, impartiality and fairness
Equity is the name given to the set of legal principles, in jurisdictions following the English common law tradition, which supplement strict rules of law where their application would operate harshly. In civil legal systems, broad "general clause" allow judges to have similar leeway in applying the code.
Equity is commonly said to "mitigate the rigor of common law", allowing courts to use their discretion and apply justice in accordance with natural law. In practice, modern equity is limited by substantive and procedural rules, and English and Australian legal writers tend to focus on technical aspects of equity. There are 12 "vague ethical statements" which guide the application of equity, and an additional five can be added.
As noted below, a historical criticism of equity as it developed was that it had no fixed rules of its own, with the Lord Chancellor from time to time judging in the main according to his own conscience. As time went on the rules of equity did lose much of their flexibility, and from the 17th century onwards equity was rapidly consolidated into a system of precedents much like its common-law cousin.
Charles Dickens' Bleak House parodied the excessive time and expense associated with the Court of Chancery, the court that heard suits in equity in 19th-century England.
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