Equity & Trusts Introduction Flashcards

What is the historical origin of equity in the English legal system?

Answer: Equity developed from petitions to the Lord Chancellor for relief where the common law was inadequate or too rigid

Equity developed from petitioners approaching the Lord Chancellor (originally a clergyman with a conscience) for relief where the common law courts provided inadequate remedies. The Court of Chancery emerged as a separate court administering equitable principles.

What did the Judicature Acts 1873-75 achieve in relation to equity and common law?

Answer: They fused the administration of law and equity into a single court system, though the bodies of law remain distinct

The Judicature Acts 1873-75 merged the common law courts and Courts of Chancery into a unified court structure (the Supreme Court of Judicature), so that any court could apply both law and equity. The substantive bodies of law, however, remained distinct.

What is a 'trust' in equity?

Answer: An arrangement where one person (trustee) holds property for the benefit of another (beneficiary)

A trust is an equitable obligation binding a person (the trustee) who holds property (the trust property) to deal with it for the benefit of another (the beneficiary) or for a valid purpose. It separates legal title (in the trustee) from beneficial ownership (in the beneficiary).

Who are the parties to a trust?

Answer: The settlor (who creates the trust), the trustee (who holds and manages the property), and the beneficiary (who benefits)

A trust typically involves three parties: the settlor (who declares the trust or transfers property to the trustee), the trustee (who holds legal title and manages the property), and the beneficiary (who holds the equitable interest and for whose benefit the trust is held).

What is the 'maxim' that equity follows the law?

Answer: Equity will generally conform to the rules of common law unless there is good reason to depart from them

The maxim 'equity follows the law' means that equity generally operates within the framework of common law and supplements rather than contradicts it. Courts of equity would respect legal rights but could intervene where conscience required.

What is the 'maxim' that equity will not suffer a wrong without a remedy?

Answer: Where a legal wrong exists and common law provides no adequate remedy, equity will intervene to provide relief

This maxim expresses equity's role as a supplement to common law — where a legal wrong exists but common law provides no adequate remedy, equity will step in with its own remedies such as injunction, specific performance, or account of profits.