Common Law and Equity (2024)

FAQs

What is common law versus equity? ›

Paying money and ordering punishment was usually the remedies in Common Law court. Equity pretty much picked up where Common Law was lacking. It would demand fairness when justice was just not enough. Court consisted of only a judge who ordered actions that demanded a performance other than paying money.

Many people think that winning a lawsuit means winning money. That isn't always the case. There are two types of claims: legal and equitable. While plaintiffs pursuing a legal claim ask a court to award money, litigants bringing an equitable claim ask a court to either prompt or stop a particular action or event.

Common law, also known as case law, is a body of unwritten laws based on legal precedents established by the courts. Common law draws from institutionalized opinions and interpretations from judicial authorities and public juries. Common laws sometimes prove the inspiration for new legislation to be enacted.

Examples: Suit in equity: A homeowner files a lawsuit against their neighbor to stop them from building a fence that would block their view. The homeowner is seeking an injunction, which is an equitable remedy, to prevent the neighbor from building the fence.

Common equity is the amount that all common shareholders have invested in a company. Most importantly, this includes the value of the common shares plus retained earnings and additional paid-in capital.

Equity is the amount of capital invested or owned by the owner of a company. The equity is evaluated by the difference between liabilities and assets recorded on the balance sheet of a company. The worthiness of equity is based on the present share price or a value regulated by the valuation professionals or investors.

A court will usually award equitable remedies when a legal remedy is insufficient or inadequate. For example, courts will generally award equitable relief for a claim which involves a particular or unique piece of real estate, or if the plaintiff requests specific performance.

equity. n. 1) a venerable group of rights and procedures to provide fairness, unhampered by the narrow strictures of the old common law or other technical requirements of the law.

A court of equity is a type of court with the power to grant remedies other than monetary damages. These remedies include injunctions, writs, or specific performance among others.

The defining principle of common law is the requirement that courts follow decisions of higher level courts within the same jurisdiction. It is from this legacy of stare decisis that a somewhat predictable, consistent body of law has emerged.

What are the pros and cons of common law? ›

Pros and Cons

The benefit of a common law system is that you can be confident of what will happen in your case if a similar case has been heard before. The drawback is that if you have an unusual case, there is nothing to stop a judge creating a new law and applying it to your case.

You can also call common law case law or judicial precedent.

Equity came as an alternative to common law and was applied as a result of the Roman Catholic Chancellor who heard these cases and applied equity based on Roman Law. Ultimately, Courts of Chancery were developed under the Chancellor which applied equity rather than common law.

For example, if someone owns a house worth $400,000 and owes $300,000 on the mortgage, that means the owner has $100,000 in equity. For example, if a company's total book value of assets amount to $1,000,000 and total liabilities are $300,000 the shareholders' equity would be $700,000.

Pay equity laws prohibit employers from paying employers less based solely on gender. All 50 states and the District of Columbia follow the Equal Pay Act of 1963, which prohibits discrimination on the basis of sex. Local laws vary widely from state to state.

Traditionally, English courts followed a distinction between courts of law, which could grant exclusively monetary damages, and courts of equity, which could not. The Court of Chancery was an example of an early English court of equity. This distinction between the two types of courts has now largely been dissolved.

Equity is defined as the guarantee of fair treatment, access, opportunity, and advancement for all students, faculty, and staff, while at the same time striving to identify and eliminate barriers that have prevented the full participation of some groups.

The main difference between the two is that common law is based on past judicial opinions, while statutory law is based on current statutes (written laws). Examples of statutory laws include traffic laws like driving on a suspended license, drug laws like those regarding drug possession, etc.