Equitable remedy
Encyclopedia
Equitable remedies are judicial remedies developed and granted by courts of equity, as opposed to courts of common law. Equitable remedies were granted by the Court of Chancery
in England
, and remain available today in most common law jurisdictions. In many jurisdictions, legal and equitable remedies have been merged and a single court can issue either-or both remedies. Despite widespread judicial merger, the distinction between equitable and legal remedies remains relevant in a number of significant instances. Notably, the United States Constitution
's Seventh Amendment
preserves the right to a jury, trial rights in civil cases over $20 to cases "at common law".
The distinction between types of relief granted by the courts is due to the courts of equity, such as the Court of Chancery in England, and still available today in common law
jurisdictions. Equity is said to operate on the conscience of the defendant, so an equitable remedy is always directed at a particular person, and his knowledge, state of mind and motives may be relevant to whether a remedy should be granted or not.
Equitable remedies are distinguished from "legal" remedies (which are available to a successful claimant as of right) by the discretion of the court to grant them. In common law jurisdictions, there are a variety of equitable remedies, but the principal remedies are:
The two main equitable remedies are injunctions and specific performance, and in casual legal parlance references to equitable remedies are often expressed as referring to those two remedies alone. Injunctions may be mandatory (requiring a person to do something) or prohibitory (stopping them doing something). Specific performance requires a party to perform a contract, for example by transferring a piece of land to the claimant.
An account of profits is usually ordered where payment of damages would still leave the wrongdoer unjustly enriched
at the expense of the wronged party. However, orders for an account are not normally available as of right, and only arise in certain circumstances.
Rescission and rectification are remedies in relation to contract
s (or, exceptionally, deed
s) which may become available.
Constructive trusts and tracing remedies are usually used where the claimant asserts that property has been wrongly appropriated from them, and then either (i) the property has increased in value, and thus they should have an interest in the increase in value which occurred at their expense, or (ii) the property has been transferred by the wrongdoer to an innocent third party, and the original owner should be able to claim a right to the property as against the innocent third party.
Equitable liens normally only arise in very specific factual circumstances, such as unpaid vendor's lien.
Equitable principles can also limit the granting of equitable remedies. This includes "he who comes to equity must come with clean hands"
(i.e. the court will not assist a claimant who is himself in the wrong or acting for improper motives), laches
(equitable remedies will not be granted if the claimant has delayed unduly in seeking them), "equity will not assist a volunteer" (meaning that a person cannot litigate against a settlor without providing the appropriate consideration e.g. Money) and that equitable remedies will not normally be granted where damages
would be an adequate remedy. The most important limitation relating to equitable remedies is that an equitable remedy will not lie against a bona fide purchaser for value without notice.
Interestingly, damages can also be awarded in "equity" as opposed to "at law", and in some legal systems, by historical accident, interest on damages can be awarded on a compound basis only on equitable damages, but not on damages awarded at law. However, most jurisdictions either have ended this anachronism, or evinced an intention to do so, by modernising legislation.
Court of Chancery
The Court of Chancery was a court of equity in England and Wales that followed a set of loose rules to avoid the slow pace of change and possible harshness of the common law. The Chancery had jurisdiction over all matters of equity, including trusts, land law, the administration of the estates of...
in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, and remain available today in most common law jurisdictions. In many jurisdictions, legal and equitable remedies have been merged and a single court can issue either-or both remedies. Despite widespread judicial merger, the distinction between equitable and legal remedies remains relevant in a number of significant instances. Notably, the United States Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
's Seventh Amendment
Seventh Amendment to the United States Constitution
The Seventh Amendment to the United States Constitution, which was ratified as part of the Bill of Rights, codifies the right to a jury trial in certain civil cases. However, in some civil cases, the Supreme Court has not incorporated the right to a jury trial to the states in the fashion which...
preserves the right to a jury, trial rights in civil cases over $20 to cases "at common law".
The distinction between types of relief granted by the courts is due to the courts of equity, such as the Court of Chancery in England, and still available today in common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
jurisdictions. Equity is said to operate on the conscience of the defendant, so an equitable remedy is always directed at a particular person, and his knowledge, state of mind and motives may be relevant to whether a remedy should be granted or not.
Equitable remedies are distinguished from "legal" remedies (which are available to a successful claimant as of right) by the discretion of the court to grant them. In common law jurisdictions, there are a variety of equitable remedies, but the principal remedies are:
- injunctionInjunctionAn injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
- specific performanceSpecific performanceSpecific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential...
- account of profitsAccount of profitsAn account of profits is a type of equitable remedy most commonly used in cases of breach of fiduciary duty...
- rescissionRescissionIn contract law, rescission has been defined as the unmaking of a contract between parties. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract .-In court:Rescission is an...
- declaratory reliefDeclaratory reliefDeclaratory relief is a judge's determination of the parties' rights under a contract or a statute, often requested in a lawsuit over a contract. In theory, an early resolution of legal rights will resolve some or all of the other issues in the matter....
- rectificationRectification (law)Rectification is a remedy whereby a court orders a change in a written document to reflect what it ought to have said in the first place. It is an equitable remedy, which means the circumstances where it can be applied are limited....
- equitable estoppel
- certain proprietary remedies, such as constructive trusts
- subrogationSubrogationSubrogation in its most common usage refers to circumstances in which an insurance company tries to recoup expenses for a claim it paid out when another party should have been responsible for paying at least a portion of that claim....
- in very specific circumstances, an equitable lien
- equitable compensationCompensationCompensation can refer to:*Financial compensation, various meanings*Compensation , various advantages a player has in exchange for a disadvantage*Compensation *Compensation , by Ralph Waldo Emerson...
The two main equitable remedies are injunctions and specific performance, and in casual legal parlance references to equitable remedies are often expressed as referring to those two remedies alone. Injunctions may be mandatory (requiring a person to do something) or prohibitory (stopping them doing something). Specific performance requires a party to perform a contract, for example by transferring a piece of land to the claimant.
An account of profits is usually ordered where payment of damages would still leave the wrongdoer unjustly enriched
Unjust enrichment
Unjust enrichment is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing.Definition:...
at the expense of the wronged party. However, orders for an account are not normally available as of right, and only arise in certain circumstances.
Rescission and rectification are remedies in relation to contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s (or, exceptionally, deed
Deed
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed...
s) which may become available.
Constructive trusts and tracing remedies are usually used where the claimant asserts that property has been wrongly appropriated from them, and then either (i) the property has increased in value, and thus they should have an interest in the increase in value which occurred at their expense, or (ii) the property has been transferred by the wrongdoer to an innocent third party, and the original owner should be able to claim a right to the property as against the innocent third party.
Equitable liens normally only arise in very specific factual circumstances, such as unpaid vendor's lien.
Equitable principles can also limit the granting of equitable remedies. This includes "he who comes to equity must come with clean hands"
Unclean hands
Unclean hands, sometimes called the clean hands doctrine or the dirty hands doctrine, is an equitable defense in which the defendant argues that the plaintiff is not entitled to obtain an equitable remedy on account of the fact that the plaintiff is acting unethically or has acted in bad faith with...
(i.e. the court will not assist a claimant who is himself in the wrong or acting for improper motives), laches
Laches (equity)
Laches is an "unreasonable delay pursuing a right or claim...in a way that prejudices the [opposing] party" When asserted in litigation, it is an equitable defense, or doctrine...
(equitable remedies will not be granted if the claimant has delayed unduly in seeking them), "equity will not assist a volunteer" (meaning that a person cannot litigate against a settlor without providing the appropriate consideration e.g. Money) and that equitable remedies will not normally be granted where damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
would be an adequate remedy. The most important limitation relating to equitable remedies is that an equitable remedy will not lie against a bona fide purchaser for value without notice.
Interestingly, damages can also be awarded in "equity" as opposed to "at law", and in some legal systems, by historical accident, interest on damages can be awarded on a compound basis only on equitable damages, but not on damages awarded at law. However, most jurisdictions either have ended this anachronism, or evinced an intention to do so, by modernising legislation.