Assignment no.

3
Business law and Taxation

Submitted to: Dr. Zeeshan

Submitted by: Group 2
Members
Wasim Cheema
Syed Ali Haider
Ali Haider
Arslan Arif
Usman Zaman
M. Abubakar
Semester: BBA 8th
LBS

UNIVERSITY OF LAHORE (CHENAB CAMPUS)

Equity Law Support Business Law

Equity law is derived from old English common law, when courts used their discretion to apply
justice in accordance with natural law. Equity law supersedes common law and statute law when
there is a conflict between the two and neither can appropriately bring the correct verdict.
Equity law came in response to the rigid procedures of England’s legal courts. Frustrated
plaintiffs turned to the King when they could not get the outcome needed to continue living. The
King then formed the Court of Chancery to deal with the law of Equity.
In modern practice, the biggest distinction between law and equity is the remedies each offers. In
a civil lawsuit the court will award monetary damages, however, equity was formed when
monetary damages could not adequately deal with the loss. An example of this is if someone is
infringing on a trademark of yours, you can get monetary damages for the loss, but your business
could be ruined if they continue. Equity is the additional solution that allows a court to tell
another person to stop doing something via an injunction, among other things.
Another distinction is that the judge is the sole decision-maker when it comes to equity. In the
United States today, the federal courts and most state courts have combined the common law and
equity law into a court of general jurisdiction. Courts of equity were highly questionable when
they existed as many people distrusted the obscure judge-made rule. Generally, equity law goes
against the institution of law in that it is not predictable by being based on past precedent.
The federal courts got rid of law/equity separation with the adoption of the Federal Rules of Civil
Procedure in 1938. Today, only three states still have separate courts for law and equity.
Delaware still obtains a Court of Chancery and is a main reason for the incorporation practices
there. The Court of Chancery usually handles corporate law, trusts, wills, probate, marriages and
divorces.
Finding an attorney who knows the history of Equity law, where it is still used and applied are all
things that will help in any area of law to determine what equitable relief can be obtained.
Equity has been proven to be exceptionally flexible in meeting new challenges to the legal
system and acting as a reform mechanism. As society saw an increase in divorces, women who
had no legal interest in the family home would have been left unprotected had the courts not
recognized that women had an equitable interest in the family home and could not have been
evicted until Parliament had the opportunity to pass appropriate legislation in the Matrimonial
Homes Act 1967. There were further developments of new remedies in the form of Mareva
Injunctions (where the courts can freeze the assets of a party to prevent removal of finances from
the jurisdiction) and Anton Piller orders (where the court can order a search of premises and the
seizures of documents and items). Equity therefore provides a supplement to common law,
ensuring that practical remedies where common law is insufficient.
Equity has shown that in can develop along with current times, by making new rules such as
promissory estoppel, which is an act that can stop a party to a contract enforcing their legal rights
when they have given their word that they won’t. High Trees housing case (1947) where a
landlord agreed to lower rent during WW2 due to economic difficulties, and then tried to enforce
the original contract after the war to collect the difference between the rent collected and the rent
which was originally agreed on. Lord Denning stated that parties must comply with the promise
they had made, so the rent was put back up but the rent from the previous 5 years didn’t have to
be paid.