Difference Between Law and Equity

Edited by Diffzy | Updated on: April 30, 2023


Difference Between Law and Equity

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There are two main types of law in the United States: common law and equity law. You may have heard both terms, or you may be wondering what they mean and how they’re different from each other.

Equity law focuses on legal relationships between people, while common law focuses on legal relationships between individuals and the government. Let’s take a closer look at how they’re different and what they both entail so you can get an idea of how they work together in our legal system today.

Law vs Equity

The legal distinction between law and equity has long frustrated both laymen and lawyers alike. However, after you read through these definitions of each term, you’ll find that things get much easier to understand—and even clearer to see why so many people have trouble telling them apart! The law deals with rules, regulations, statutes, and ordinances that are enforced by government agencies and tribunals like judges and juries.

In contrast, equity concerns itself with remedies for unjust enrichment or wrongful acts when a statute or ordinance may not be applicable—oftentimes due to an oversight on behalf of lawmakers or a changing social climate that leaves certain problems unaddressed by existing laws in favor of more pressing issues. For example, if someone is injured because of a poorly designed product, they can sue under tort law (law) or contract law (equity).

If they win their case but cannot collect damages from the manufacturer because it went out of business before they filed suit, then they can file suit under equity instead. This is just one example of how equitable relief differs from legal relief. These differences don't mean that one system is better than another; rather, it means that there are instances where one system is better suited to handle a given problem than another system would be.

Difference Between Law and Equity in Tabular Form

Parameters of Comparison Law Equity
Define Law is derived from custom, which is a shared set of beliefs and rules that are socially accepted as correct. Equity is a legal term referring to fairness and comes from an Anglo-French word for the right
Settling of a Case All things considered, in the courtroom, a continuous case is heard by the jury and by the appointed authority and afterward choice is made by them. In value, just the adjudicator hears and afterward settles the case without anyone else/herself.
Financial harms Law court can arrange financial harms Equity court doesn't organization money-related harms.
Writs and Injunctions Law courts request writs Equity court requests orders.

What is Law?

Law is derived from custom, which is a shared set of beliefs and rules that are socially accepted as correct. A custom can be a rule, such as Don't steal or Always yield to traffic when you're turning right. And it may or may not be enforceable in court; sometimes a community might decide that violators of certain social customs will be shunned by their neighbors instead of sued for monetary damages in civil court. The community might also decide to go so far as to punish transgressors for their violation with criminal penalties, but that isn't required to make it a law. Whatever form it takes—whether society considers it valid or irrelevant—custom reflects what people have done in the past and where we've come from as a civilization.

What is Equity?

Equity is fairness or justice; to be treated equally with others. The definition of equity, a legal term referring to fairness, comes from an Anglo-French word for right (from Latin aequus), as in an eye for an eye. In law and business, equity refers to ownership of property or other assets in proportion to one's contribution toward its value; sometimes used interchangeably with share. You may have heard people refer to things that are fair or just as being equitable; lawyers describe it as a state of affairs in which all parties involved are treated fairly.

Defining Law and Equity

The law and equity are two branches of the legal system in most common law jurisdictions. The difference between law and equity comes down to how courts resolve disputes based on their legal reasoning and tradition, how much discretion judges have, and whether or not legal cases are heard by a jury. The differences between these two areas of practice help to create a consistent body of rules that apply fairly across all courts at any time so that citizens can have confidence in knowing what to expect when they enter into litigation or file an appeal. Even though many people use these terms interchangeably, there is a clear difference between them, especially when it comes to court proceedings and outcomes.

Definition of Public

When looking at the law, you must always keep in mind that it refers to cases that are brought against parties who have been granted access to what is known as the court of public opinion. In other words, these are private matters between two individuals or corporations who have voluntarily agreed to let their disagreements be settled through arbitration by a judge or jury (in theory, anyway). For example, if an employee sues his boss for back pay after he’s fired for a valid reason, that’s a case of the law. On one hand, you have David and on another hand you have Goliath; it’s just not a fair fight from start to finish.

Definition of a Court

A court is a judicial institution that hears and decides lawsuits. The set of rules and procedures governing cases of law is known as a legal system (or common law). The term court applies to civil (private) or criminal (public) proceedings, depending on whether an individual or government body is involved. For example, U.S. federal courts are part of American common law while courts in France operate under the French civil law system which was codified in 1804 by Napoleon Bonaparte's decree; both jurisdictions are considered courts by the U.S.

The Challenges with Law, Equity, Courts, and Public

The law is a subset of equity and equity is an application of public policy which is open to interpretation and scrutiny, these are two aspects that make these concepts extremely hard to understand by laymen. Often these three concepts cannot be separated and when you try to do so, you may end up misinterpreting them altogether making it even harder for one to understand their basic differences. Understanding law, equity, courts, and the public can be daunting but some experts can help if you want some legal advice or need representation in court. There are many free resources online as well but remember nothing beats experience so when in doubt go ahead and consult a professional because all it takes is one mistake or misunderstanding for your case to go south quickly. Remember everything from contracts to small claims court is equally important and has different nuances within each. These intricacies have caused many issues in the past that could have been easily avoided with proper education on how they work. If you ever find yourself confused about any of these concepts, seek out legal assistance immediately before doing anything else. A lot can happen when emotions get involved, especially when money is involved; getting things sorted out properly from start will save everyone a lot of time and headache later on down the road.

How LegalZoom works with law and equity

Law and equity are two different concepts that lawyers can use in legal cases or disagreements. If you have a simple question about your divorce, copyright infringement, or one of the hundreds of other issues that could go to court, LegalZoom can help you find an answer using the law. But for some cases, like if you're claiming ownership over someone else's property, a lawyer would use equity to defend your claim. To learn more about how law and equity play into small business disputes, read our guide on how LegalZoom helps with law and equity, check out our Q&A library, or get started on your legal documents today!

Law is all about fairness. When it comes to public policy questions like What rules should govern everyone’s actions? or Who should make those rules? lawyers deal mostly with the law—the written rules themselves and their interpretation by judges. In modern society, we’ve delegated these decisions to professionals we call judges who live in courthouses all across America—their job is to interpret what existing laws mean when applied to new situations as they arise. These interpretations become new precedents (known as case law) that we then rely on every time there’s a dispute involving similar facts, which brings us back around full circle...to equity again!

Main Difference Between Law and Equity in Points

Most legal problems require both law and equity to resolve. But what are they, exactly? There are many ways to answer that question, but here’s a simple one:

  • Law refers to specific things and equities refer to general principles that are applied in certain cases.
  • For example, say you loan $10,000 to your neighbor under very specific terms—that he pays it back in 30 days with 10% interest—and he defaults on his payment by 15 days (or 45 days with full interest).
  • Your legal remedies are limited because you made an enforceable contract for $10,000 over 30 days at 10% interest.
  • If you want more money from him, you have to sue him for breach of contract.
  • You can get a judgment against him requiring him to pay you $11,500 ($10,000 plus court costs and attorney fees), but that’s all.
  • You can't ask for any additional amount just because you need more than $11,500 or just because he has other assets. That would be inequitable.
  • In contrast, if your neighbor borrowed another friend's car without permission and crashed it into yours causing extensive damage, then neither party had an agreement about who was responsible for which damages—so no enforceable contract exists between either party--but there is still liability based on negligence or fault which is equitable.


An attorney can be a litigator, an advocate, or a counselor—it depends on your state’s rules of legal practice and whether you’re practicing in federal court (which typically follows different rules than state courts). The lawyer you hire will know what area of law they’re licensed to practice and what their area of expertise is. For example, some attorneys have backgrounds in family law or bankruptcy law; others may only do corporate transactions. When deciding who to hire for any given matter, make sure you select someone with experience handling cases similar to yours so that your interests are protected from start to finish. In addition, it’s important to remember that just because an attorney is licensed doesn’t mean he or she has no-fault insurance coverage. It's best to confirm coverage before signing anything, especially if you plan on hiring someone for a complicated case. As long as you're comfortable with your choice and trust his or her judgment, feel free to hire based on reputation alone. Remember: While having an attorney at law after your name sounds impressive, it isn't everything when it comes to legal representation!

FAQs About Law and Equity

What is the relationship between equity and common law?

The main difference between law and equity is their sources of authority. Law comes from a legislative body, such as Congress or Parliament, while equity is based on judicial decisions made by judges in courts of law. In other words, common law involves legal precedents and case law while equity deals with fairness and justice but not specific laws passed by a legislature (although some jurisdictions have mixed legal systems that use both common law and equity). Here are some examples to illustrate these differences in practice.

Which law is based on equity?

There are two main types of law: legal and equitable. Legal law is similar to equity; both originate from court decisions. However, there are some important differences between legal and equitable laws that are critical to understanding how these two systems of law work in practice. One key difference is in how they treat private property rights -- legal rules usually take precedence over equitable ones unless equity would lead to a greater good or a lesser evil than legal precedent would dictate.



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"Difference Between Law and Equity." Diffzy.com, 2024. Thu. 29 Feb. 2024. <https://www.diffzy.com/article/difference-between-law-and-equity-380>.

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