Meaning of Equity

The word “equity” means fair or just in its wider sense. Equity is a legal system for
obtaining a fair result when existing laws do not provide solution. It is a set of legal
principles that supplement strict rules of law where their application would operate harshly.
Definitions of Equity
Plato termed equity as “equity is a necessary element supplementary to the imperfect
generalization of legal rules.”
Blackstone defines equity as the soul and spirit of all law.
According to Snell, equity is “a portion of natural justice which, although of a nature
suitable for judicial enforcement, was for historical reasons not enforced by the Common
Law courts, and omission which was supplied by the Court of Chancery.”
Functions of Equity
 Equity operates to achieve a higher form of justice.
 Equity works to ensure equality of outcome in individual cases so that there is
fairness between litigants.
 Equity applies the principles of natural justice.
Historical development
Law of Equity came into existence during the 13th century in response to the rigid
procedures of England’s legal courts. There were many issues, which were not fallen in
the jurisdiction of the Common Law Courts.
The fact that there was only one remedy available which was monetary compensation. It
soon became a common issue that remedy was not always the appropriate form of
remedy. People found themselves very frustrated under this common law, As the public
became dissatisfied with the system they began to petition to the King, as the “foundation
of justice” for a remedy.
The king decided the cases on the principles of natural justice. Natural Justice is based on
good consciousness, honesty, equality, truth, uprightness, good faith, fairness, ethics, and
morality etc. Later on, when the cases exceeded then King delegated this power of
administration of justice on his behalf to the Chief of the House of Commons, named
Chancery. This Court was called Chancery Court and was responsible for the
administration of justice on the base of principles of natural justice.
Gradually, over the years they built up a large body of principles. These principles together
then formed a law; ‘Equity'.
Equity developed new remedies
Equity has developed a number of special remedies that can be used when damages are
not adequate. The most important equitable remedies are decrees of specific performance
and injunctions. Under an order of specific performance, one party to a contract is ordered
to perform their contractual obligations. Whereas, an injunction is a court order to a party
to refrain from doing, or possibly to do, a particular act. Other equitable remedies include
rescission, rectification, recovery of possession, cancellation of documents, Declaration of
rights, and the appointment of a receiver
Why equity is important, why do we have the need of equity
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. This is a situation where law is silent. Here principles of
natural justice are applied. In Equity “ubi jus ibi remedium” is applied meaning of which are
where there is right there is remedy.