An Introduction to Equity

Hello. My name is Professor Gary Watt, I'm at the law school of the University of Warwick, and I'm the author of certain books on trusts and equity for OUP. And I'm just going to do a little video now—a series of videos, very short—just to give you a taste of some of the key concepts in the law of trusts and equity. And I'm going to begin with the most basic legal idea there is, the idea of the rule, because this is a very good way of explaining what makes equity different to the common law.

Now, the common law is concerned with general rules, and I have here a ruler, and a ruler as you can see is a very straight line, and that's what a rule means; it's a general principle that applies rigidly, strictly, in all cases. Now, life—the human being, human relationships—are not straight, they are not regular, and that's where equity comes in; because if we, for example, take the shape of a human hand, which is quite flat, but not perfectly flat, you'll always find a gap, a small gap, between the strict rule of the law and the shape of human life.

So, equity deals with that gap. Equity steps in to try and produce more perfect justice to actually fill the gap between the strict rule and the shape of life, and that makes equity a very exciting concept. And I hope that as you read through the book you will see all the different ways in which equity operates to fill that gap.

Just to give you one example: one of the most basic rules in general common law is the rule of contract and the remedy that that brings. Now the remedy—standard remedy for breach of contract—is damages. If I promised to sell you a car and I don't, then I have to remedy my breach with damages. But damages—which is the strict and straight rule, like a metal ruler or rigid plastic ruler—doesn't cover some cases. One of the cases it doesn't cover is land.

Now if I promise to sell you land, it will not be an adequate remedy for you to receive money—damages—instead of the land, because land is all unique. What you need is a special remedy that's different to the general straight rule of damages. This is where equity steps in. Equity gives you a particular remedy called ‘specific performance’. What does this mean? It means if I promised to sell you land, well, land is unique; therefore equity will insist upon me performing that contract. So, the equitable remedy is not the straight rule of damages but a more fitting rule of specific performance.

Now, this is not a new idea. Aristotle, believe it or not, if we go back that far, also used the idea of the rule to explain equity. He said:The best rule, the equitable rule, is a rule made of lead; yes, it's metal, and therefore it has a certain solidity and it can be relied upon, but it is not rigid. Equity, like a rule of lead, bends to fit a particular case. Now, we don't often hear Aristotle referred to in course nowadays, but the basic principle that we apply in English law today is the same flexible idea of equity in distinction to the rigid rule of law.