a legal system that has existed in England from the 14th century along with common law.
The equity system took shape gradually, as a result of the extreme inflexibility of common law, which often prevented subjects from bringing suit in the king’s courts. In these cases or in cases where a litigant was not satisfied with the court’s judgment, the litigant could petition the king for mercy and equity. Owing to growth in the number of such appeals, a whole apparatus with its own rules for resolving cases was set up under the lord chancellor. This apparatus gradually came to be viewed as the Chancellor’s Court, or Chancery. Because this court was not bound by the norms of common law, it was considered to be guided by the principles of equity; hence the name court of equity. In the course of its work, the Chancery developed special norms based on precedents, the body of which served as the rules of equity.
The court of equity had its broadest powers in civil law, because the cumbersome, formalized common-law system did not keep pace with the demands of economic development. The Chancery did not have the right to set aside on appeal the judgment of a common-law court, but it could deliver its own judgment, which ultimately nullified or fundamentally altered the judgment of the common-law court. Certain Anglo-Saxon legal institutions took shape under equity. Examples include the principles of trusts and of specific performance of contracts. (Common law recognized only monetary damages as a penalty for failure to execute a contract.)
The dualism of common law and equity complicated the already cumbersome and intricate system of English law, and in 1873 equity was included in the system of common law. However, the legal institutions that arose as part of equity are clearly delineated from common-law institutions. In theory and practice, equitable rights, that is, rights based on equity, are distinct from subjective rights, which are based on common law.