INTRODUCTION

EQUITY FOLLOWS THE LAW

This maxim is also expressed as “aequitas sequitur legem”, which means that justice
will not grant a remedy that goes against the law. This maxim states that equity is
complementary to law and does not supplant it. Additionally, this principle is also
demonstrated by the fact that equity will not disregard legal requirements, even if
they are strict and formal. In the majority of instances, law is followed by equity. In
most cases, it is only applicable in narrowly circumscribed situations in which there
are compelling reasons not to deviate from the law.

ACTS IN PERSONAM

This maxim can be explained by separating rights in rem from rights in personam.
Rights in rem are applicable against the world, while rights in personam are
applicable against an individual. In England, the Common Law Court had power over
both people and property, while the Chancery Court only had power over people.
The Equity court's coercive power was derived from its authority to hold the offender
in contempt of court and punish them accordingly. Additionally, to the extent that a
person was within the jurisdiction, the law of equity would apply even if the property
in question was located outside the jurisdiction.

Equity looks to the intent rather than to the form

Common law favours formalities over substance. Statutes or common law may
require strict formalities that must be followed to obtain legal rights. However, equity
tends to focus on the substance of the issue and disregards strict form when it is
irrelevant to the substantive justice of a transaction. To simplify, this is the maxim
that was used to establish an equitable remedy that permits the terms of a contract
to be interpreted in light of the parties' intent. Equity does not favour penalties in
contract. If a penalty applies for failure to perform an obligation, equity will deny the
claim unless it represents a reasonable estimate of loss.