Equity

Question 1

How did equity come about?

Answer 1

• Because of the problems posed by the common law, aggrieved litigants who felt that justice was not served in the King’s Courts began to petition the King to do justice in particular instances.
• By the end of the 13th century, such petitions were dealt with by way of a formal procedure by the Court of Chancery, presided over by the Lord Chancellor.

Question 2

What was the origin of the law of trusts?

Answer 2

• When landowners went abroad, they needed someone to look after their lands, to perform feudal duties and collect rents in their absence. The custom arose whereby a landowner would transfer the legal title to his estate to a trusted friend on the basis that it would be used for the benefit of the departed landowner and his family. Instances arose of the recipient of an estate ignoring the terms and instead attempting to exercise his status as legal owner for his own benefit.
• The common law courts refused to recognise the rights of the original landowner and his family on the grounds that, by having no legal title, they had no locus standi (standing or interest) in the King’s Courts. However, the Chancellor intervened in equity on the ground that it would be unconscionable for the recipient of the estate to ignore the terms of the transfer. The recipient would thus be compelled to hold the land for the use and benefit of the original landowner and his family.

Question 3

What is equity of redemption?

Answer 3

flexible approach which allowed redemption by repayment even after the due date had passed

Question 4

Which should prevail - equity or common law?

Answer 4

equity

Question 5

Why was a two system court difficult/ caused problems? What solution was proposed to fix it?

Answer 5

If both an equitable remedy (such as an injunction) and damages were required, two actions would have to be brought: one at common law and one in Chancery. - causing a duplication of legal proceedings
- As a partial resolution to the problem, the Common Law Procedure Act 1854 gave common law courts some power to grant equitable remedies. The Chancery Amendment Act 1858 gave the Court of Chancery power to award damages in lieu of an equitable remedy.

Question 6

What was important about the Judicature Acts 1873-1875?

Answer 6

These Acts abolished the old division of the three common law courts and the Court of Chancery, and instead created a single High Court and Court of Appeal which could apply equally the rules and remedies of both common law and equity. In cases of conflict, equity still prevails.

Question 7

Which type of remedy is discretionary and which type of damages are available as of right?

Answer 7

equitable remedies are still discretionary, whilst common law damages are available as of right

Question 8

What are the maxims of equity?

Answer 8

The principles of equity aka the equitable maxims

• consolidated in the 17th and 18th centuries
• guided the courts in deciding cases and remain applicable

Question 9

Name examples of equitable maxims.

Answer 9

· Equity will not suffer a wrong to be without a remedy.
· Equity follows the law.
· One who seeks equity must do equity.
· One who comes into equity must come with clean hands.
· Delay defeats equities.

Question 10

What is the main legal remedy in English law?

Answer 10

Award of damages - financial compensation

Question 11

When are equitable remedies appropriate?

Answer 11

Equitable remedies are awarded only if damages would not be an adequate remedy.

Question 12

What is the equitable doctrine of ‘laches’?

Answer 12

The equitable doctrine of ‘laches’ is that delay in pursuing an equitable claim or remedy may prevent the claimant obtaining relief. This is based on the maxim that delay defeats equities.

Question 13

What are the main equitable remedies?

Answer 13

• Specific performance.
• Injunctive relief.
• Declaratory relief.
• Rescission.
• Rectification.

Question 14

What is the specific performance remedy?

Answer 14

Specific performance is an order by the court to compel a party to perform something they have promised to do under a contractual agreement. It is an equitable remedy available for breach of contract. Specific performance is a discretionary remedy and is not available as of right for every breach of contract.

Question 15

Where is specific performance available?

Answer 15

where:
ü There is a valid and enforceable contract.
ü Damages would not be an adequate remedy for the claimant.

Question 16

What is the injunctive relief remedy?

Answer 16

• An injunction is an order that requires a party to legal proceedings either:
  > To do something (a mandatory injunction).
  > To refrain from doing something (a prohibitory injunction).
• An injunction can be awarded unconditionally or subject to such terms and conditions as the court thinks fit.

Question 17

When can an injunction be awarded?

Answer 17

An injunction may be awarded only where damages would not adequately compensate the claimant. Injunctions can be interim (obtained before the conclusion of legal proceedings) or final (obtained at the conclusion of legal proceedings).

Question 18

What is the declaratory relief remedy?

Answer 18

• A declaration is a legally binding statement by a court about any of the following:
  • The legal rights of the parties.
  • The existence of facts.
  • A principle of law.
  Courts can make a binding declarations whether or not any other remedy is claimed. However, a claim for a declaration alone is unusual. Generally, a declaration is sought in addition to other types of relief.

Question 19

What is the rescission remedy?

Answer 19

Rescission is the setting aside of a contract.

Question 20

When is rescission granted?

Answer 20

Rescission is granted at the court’s discretion, and may be available where a contract has been concluded as a result of:
○ Misrepresentation – where a party has been induced to enter a contract by a false representation of fact.
○ Mistake – where the contract does not correctly reflect the intentions of one or both parties.
○ Duress or undue influence – where a party to the contract was put under unlawful pressure to enter into it.

Question 21

Where is rescission available?

Answer 21

It is available at common law and in equity.
Rescission is only available where the parties can be put back to their pre-contractual position, i.e. as if the contract had never been entered into.

Question 22

What is the rectification remedy?

Answer 22

The equitable remedy of rectification corrects a document to reflect the parties’ contractual intention. Its main purpose is to correct mistakes made in recording agreements.
- if the errors in the written contract are too fundamental or extensive, rectification is not available.

Question 23

Rectification only applies on certain cases- which type?

Answer 23

Rectification only applies in the case of written contracts.