Essay: Some observations on the technique of equity

Abstract

This paper will examine equitable modes of adjudication that bring the application of law to reflect, to a greater degree, our sense of fairness and moral notions of right. Two related techniques for devising equitable interventions are suggested here. First: adjudication of disputes arising in long-standing relationships might draw on pre-existing moral duties between the parties and adapt them to frame legally binding duties in equity.
Equity operates on an expansive framing, bringing to the fore the thick relationships upon which the thinly defined legal rules might be said to operate. Second: building on the rules-versus-standards distinction, the paper argues that equity acts by imposing broad standards where it is apparent that the application of narrow legal rules achieves inconsistent ends in a given case; or if those same legal rules are applied inconsistently with the moral duties that bind those parties. Equity, therefore, tries to bring about ways in which the legal rules do not arrive at conflicting ends. The justification for having equitable adjudication is that there is a need for the legal system to acknowledge and accommodate the complexity of our lives when it intersects with the law, rather than compressing our lives into narrowly defined legal categories. The legal system’s continuing relevance depends on equitable interventions bringing the impersonal institution of the law closer to lived human experience.

Introduction

‘Equity’ refers to the body of substantive doctrine developed in the Courts of Chancery in Anglo-American countries, alongside the common law and sometimes in opposition to it. Equity’s emergence as a distinct system in the late 14th Century was the result of several failures of the common law: lack of accessible justice afforded to the poor; the absence of satisfactory remedies available with regard to certain types of disputes ‘ e.g., disputes that involved or claims that were made against the King ‘ and the obduracy of judges to address changing societal requirements.
Equity ‘ heavily influenced by Roman and canon law ‘ was committed to ‘giving effect to an enlightened sense of justice, and supplying the defects of the more archaic system of the common law.’ Equity’s special mode of reasoning was organized around the theme of conscience ‘ strongly redolent of its early ecclesiastical flavor, as the early Chancellors were clergymen ‘ eliciting interventions when the defendant was acting unconscionably. Equity was also notable for its maxim jurisprudence.
But, with time, equity became increasingly reactionary. In the 18th Century, Blackstone could declare that equity had become ‘a labored and connected system governed by established rules, and bound by precedent’ ‘ rather like the common law, in other words. This was arguably a betrayal of the promise of equity as a less formalized system, attuned to providing individualized justice.
In 1846, the Field Code enacted in New York made pioneering reforms, abolishing the separate systems of courts and bringing about a united procedure. In England, similar reforms made in 1873-75, whereby the High Court was accorded separate divisions for law and equity, with a single consolidated system of appellate courts.
Fusion brought about numerous changes but its ultimate results remain deeply contested, with opinion splitting along two main camps. One argument is that fusion did bring about changes in procedure ‘ in evidentiary matters, joinder of parties, etc., ‘ but substantive doctrines both at common law and equity remain undisturbed. The other argument is that substantive doctrines of common law and equity fused as well; equity triumphed, making the law more ethical; and distinguishing between them is now artificial.
Still, equitable concepts remain in a state of persistent confusion. For instance, there still remain widespread misconceptions about the conditions for the grant of an injunction ‘ the most commonly used equitable remedy. This confusion might partly stem from the fact that equity as a subject has disappeared from law school curricula. And equitable defenses like ‘estoppel’ and ‘unclean hands’ that explicitly sound in morality have received extraordinarily little scholarly consideration from the philosophical point of view. This in turn has led to considerable confusion in the case-law.
The immediate problem in theorizing about equity is there is undoubtedly something arbitrary about the development of equity. To make matters worse, some doctrines ‘ most notably promissory estoppel ‘ might be plausibly regarded as ‘equitable,’ although they had been developed by enterprising judges at common law. It is clear therefore that we cannot be hostages to this ‘historical’ conception of equity if we wish to attain some understanding of how equity operates today.
One possible way forward is to embrace a functional conception of equity. As Chafee reminds us, equity is also ‘a way of looking at the administration of justice’. Notions of equity are not unique to common law jurisdictions: the writings of Aristotle, and the work of the Roman praetors, contain the germ of the idea of equitable intervention in the adjudicatory process. Recent attempts at reviving the discourse on equity have followed this route. This is also, for instance, the view which underlies Professor Henry Smith’s conception of equity and its potential uses in present-day common law adjudication, where he stresses equity’s function in counteracting opportunism.
The functional conception of equity assumes that some innate advantages spring when law generally corresponds with morality; and a strong divergence between them makes it less likely that citizens comply with the law. And these problems of compliance are often spread across the system. And by designing a functional equity, we might bring the law closer to accepted ethical precepts.
It might seem strange to speak of reviving this discourse ‘ particularly since Legal Realism has shattered any illusions that legal doctrine could be mathematically applied to various circumstances ‘ a functional conception of equity might prove valuable because when moral considerations are seen as competing with ‘ rather than augmenting or qualifying ‘ legal doctrine, it is usually to the detriment of both.
This paper will attempt to address the ways in which we might revive equitable modes of adjudication to bring the application of law to reflect, to a greater degree, our sense of fairness and moral notions of right. I will attempt to put forth two related techniques for devising equitable interventions.
Part I argues that adjudication of disputes arising in long-standing relationships might draw on pre-existing moral duties between the parties and adapt them to frame legally binding duties in equity. We will rely on Daryl Levinson’s conceptualization which argues for an expansive framing of transactions between parties who habitually interact with each other ‘ rather than focusing entirely on the immediate dispute ‘ taking into account the harms and benefits the parties confer on each other in the long run. This idea is then applied to equitable interventions in private law, while also considering morally noteworthy features in such relationships such as trust reposed, promises made, certain forms of habits, etc. The argument is that equity operates on an expansive framing, bringing to the fore the thick relationships upon which the thinly defined legal rules might be said to operate.
Part II will be building on the rules-versus-standards distinction, and argue that equity acts by imposing broad standards where it is apparent that the application of narrow legal rules achieves inconsistent ends in a given case; or if those same legal rules are applied inconsistently with the moral duties that bind those parties. We will examine the case of Riggs v. Palmer, which concerned the slayer problem: whether a murderer could inherit from the commission of the murder. The application of two self-contained rules in a given case might sometimes result in consequences that seem arbitrary from the perspective of those who are affected by those rules, particularly when both rules are triggered by the same fact. I will suggest that equity imposes a broad standard on those points of intersections, and tries to bring about ways in which the legal rules do not arrive at conflicting ends.
Part III tries to provide justifications for having equitable adjudication: the argument will be that there is a need for the legal system to acknowledge and accommodate the complexity of our lives when it intersects with the law, rather than compressing our lives into narrowly defined legal categories. The legitimacy of the legal system oftentimes depends on how the legal actors, regulated by thin legal rules, would perceive them; and not merely the internal coherence of the rules themselves. And this sense of legitimacy is undermined when narrow legal rules appear to have little regard to the moral duties of legal actors (or the context in which those rules operate). This is the argument for the humanization of the adjudicatory process: the legal system’s continuing relevance depends on equitable interventions bringing the impersonal institution of the law closer to lived human experience. Part IV tries to address some of the problems raised by the application of this functional version equity and suggests some limiting principles for of equitable interventions.

I. Framing Transactions

A. Overview of Levinson’s Conceptualization of Framing Transactions
We will be borrowing quite extensively from Levinson’s conceptual method of analyzing problems in constitutional law; and it might be useful to briefly set out his principal argument. As he puts it, ‘Common-law rules and adjudication are structured around discrete transactions between strangers’ Transactional harm is the basic conceptual mold that shapes human interactions into legally cognizable events.’
Levinson observes that unlike the ‘paradigmatic’ cases at private law where the relevant facts constitute the ‘discontinuous event, sharply limited in space and time’ at which the private parties interact, the harms done by the government to private individuals can also be set-off against countervailing benefits conferred by the government over a much longer period of time. Levinson’s point is simply that narrow framing at private law could be justified because that is often the extent of the interactions between the parties ‘ the example that he gives is of a motor accident. However, such narrow frames are no longer justified when parties habitually enter into transactions with each other, doing harm and conferring benefits over time.
Although Levinson is primarily speaking only of harms and benefits in this context, we can appropriate his conceptual apparatus to private law disputes which arise in long-term relationships, without restricting ourselves to the tools he gives himself. We are primarily concerned with relationships with pre-existing moral duties between parties and how legal duties might bring them to bear. We may thus also consider relevant for framing transactions at equity those features of relationships that strike us as salient in a moral sense. These are issues that are impossible to quantify but morally noteworthy such as trust reposed, promises made, certain forms of habits and customs and other significant accretions on longtime interactions between persons, etc. It is not merely the harms and the benefits which parties confer on each other that have moral implications: other aspects which play a role in shaping our sense of the moral duties they might owe to each other, are also relevant.

B. Equity as adapting pre-existing moral duties

The conception of legal rights and wrongs between persons is perhaps most lucidly captured by the law of torts; and it provides us with easy access to examine the formalist vision of the nature of the interaction between the parties. Let us take the classic instance of a tortious wrong: a person walking down the road is struck by a car driven negligently by a stranger.
The most exacting formalist vision of the law of tort liability is perhaps the one conceived by Ernest Weinrib, who insists that the nature of the transaction between parties to a private law claim can only be properly understood internally. There is a rational structure, insists Weinrib, to the relationship between parties in private law; and Aristotle’s conception of corrective justice provides this unifying structure. A tortious collision, therefore, is a wrong committed by the defendant to the plaintiff, which enables the plaintiff to seek redress for the wrong from the tort system.
It is interesting that although Weinrib insists that the relationship between the two parties is essential to comprehending the structure of the tort system, he conceives that relationship narrowly. And although Weinrib’s thesis is hardly universally accepted, this narrow conception of relationships is accepted in tort law system generally. Even in the celebrated case of Donahue v. Stevenson, where Lord Atkin announced the principle of the duty of care owed between the parties in the ‘bilateral relationship’ that Weinrib speaks about, he phrased in this manner: ‘The rule that you are to love your neighbour becomes in law, you must not injure your neighbour”
This remains an extraordinary principle. In many ways, it represents the possible outer limit for introducing moral standards into the common law (as distinct from equity). And it is a moral standard because it is not defined in rigid terms, but as a general exhortation not to commit harm. It is obvious that it is deeply contextual: the means by which one ought to avoid harm is very different in different circumstances. But the inversion contained in Atkin’s formulation is also remarkably suggestive: in order for the principle be assimilated into tort law, a positive command has to be drawn negatively.
My point is simply this: even at this outer limit where the common law is made to observe distinctly moral notions ‘ i.e., act in such as a way that you do not injure your neighbor ‘ the background context that is permitted to percolate into the adjudicatory process is still quite narrow.
We can demonstrate this by slightly varying the facts specified earlier. The tortious wrong is now caused by the victim’s driver ‘ as in the plot of Graham Greene’s wonderful The Third Man ‘ or, better still, her domestic partner. Would this bring about any significant difference in the resulting liability? Presumably not. The defendant still owed a duty of care to the plaintiff not to drive negligently and not to injure the plaintiff: and the collision was only the result of the failure of the defendant to exercise this care that was due. In other words, duties of care are generalized to the world: the duties owed by a driver to pedestrians remain the same, regardless of whether that pedestrian is a stranger or intimately known. Perhaps a higher standard of duty is owed to children or elderly persons using the street, but the point still remains: it should not make a difference whether the child is yours or someone else’s for the purpose of how carefully you are required to drive your car.
Now assume that the tortious collision was caused between the same domestic partners, with the defendant in the process of trying to persuade the plaintiff not to take a flight to another city. And let us assume further that the strategy is successful ‘ in a manner of speaking. The plaintiff is laid up in a hospital with a broken leg and forcing her to miss the flight. But a terrible tragedy ensues: the flight that the plaintiff was supposed to take crashes into a mountain during its journey, with no survivors. But let us assume that the plaintiff still petulantly chooses to bring a claim for negligent driving. Would it be possible for the defendant to claim that the injury caused to the plaintiff was offset by certain death that might have resulted if she had been able to catch that ill-fated flight?
It seems far-fetched to believe that any court would find such a defense acceptable. This is in large part due to the nature of the duties specified in tort law: the transactions between persons are framed narrowly. Once it is shown that a duty of care has been breached, liability follows automatically. The harm done to the plaintiff could have been avoided if certain measures had been taken; and if the defendant had failed to take them, this concludes the story from the tort law perspective. And this is so even if the defendant can claim to have been in a long, loving relationship with the plaintiff prior to the tortious wrong or had (inadvertently or not) saved the plaintiff’s life thereafter.
What is interesting from our perspective is recognizing that the narrowly conceived duties of care posited in tort law do not generally accommodate or even recognize the complex relationships that exist between people generally. And tort law duties can hardly claim to displace those other duties, whether they might be moral in their origin or even if they are ultimately legal in nature.
For example, A must take care not to injure her daughter with her car, as she steps out of it to board her school bus; but this is an oddly specific negative command that sits alongside A’s other, far more demanding positive duties to her daughter: She is morally obliged (at the very least) to feed her, clothe and shelter her and give her a proper education, and this of course corresponds with her legal duty that she not let her daughter starve, or live on the streets or encourage truancy. Yet, at some moments, the daughter becomes another pedestrian, whom A is not obliged to treat any differently from others. There is not necessarily a contradiction here, but the tort law duty of care seems oddly impersonal and not really drawn from the general reservoir of duties and obligations that A owes her daughter.
To return to the tortious collision between two domestic partners, it is unlikely that equity has any scope for intervention in either scenario. Perhaps one reason for this might be connected with equity’s historical reluctance to interfere in crimes and criminal matters. And the modern notion of a tort as distinct from crimes and refined from ‘trespasses’, was not developed until the turn of the 19th Century, by which time equity’s adventurous days were well behind it.
But quintessentially equitable interventions in other areas of common law relied on concepts such as ‘unconscionability,’ ‘undue influence’ and other moral ideas, where this background relationship explicitly came to the fore. In other words, A’s duties under tort law that she owes to her spouse when she drives around in her car is no different from the duties A owes to strangers. But if A decides to enter into a contract with her spouse, her duties at this time would be very different than when she enters into contracts with strangers.
More strikingly, equitable modes of adjudication actually accommodate and replicate, so far as possible, A’s pre-existing moral duties to her dependents by modifying legal duties in certain instances. So, if Krishna is morally bound in a relationship of trust and confidence with his wife, Krishna is equally bound to adopt an analogous position in equity, when he enters into legal transactions with his wife. Krishna is obliged to have due concern for his wife’s well-being at a far more exacting level when contracting than any stranger would be obliged to. There is a sense that this form of decision-making coalesces around several of his duties ‘ legal and moral ‘ and brings about some sense of consistency among them. In other words, equity comes into play in where the rules that are designed to handle thin interactions need to be supplemented by thick relationships.
In short, equitable modes of adjudication do not regard the thin, bright lines of legal rules that traverse across the lives of legal actors at various moments in time in isolation: some of the duties are considered in the context of other relevant duties. The tort law duty of care is merely one among dozens, potentially hundreds of other duties and obligations which bind us at any moment in time to dozens of others in our general vicinity. And equity exists to give some form to the dense texture of legal and moral duties that informs so much of our actions in our lives.
This is broadly what we may call equity’s distinctive framing approach. Under certain circumstances, equity’s frame of transactions and relationships is vastly greater and more imbued with context than transactions framed under common law. And this was recognized even by Blackstone, although he quickly proceeds to use this insight to make this wry observation:
‘All suits in Equity must necessarily be of longer duration than those at Common Law, for at Common Law one or two leading points are the things upon which the whole will turn’ But in Equity every minute Circumstance must be laid open to full View ‘ So that so far from wondering that a Chancery Suit may sometimes last 20 years, we may rather be surprised that they ever end at all”
For the purpose of the present article, we shall confine ourselves to at least one such domain of equitable decision-making ‘ although there might well be others ‘ long-term relationships of trust and confidence between persons.

C. Analyzing decisions under this vision of equitable intervention

The decision of the Court of Appeals of New York in Sharp v. Kosmalski, provides an interesting illustration for equity’s capacity for generating legal (in the broad sense) duties that are analogues of pre-existing moral duties. In that case, the plaintiff, Rodney Sharp, was a middle-aged and recently widowed dairy farmer who had little formal education. He fell in love with the defendant, Jean Kosmalski, a school teacher who was sixteen years younger to him. They became frequent companions although Kosmalski repeatedly rejected Sharp’s proposals of marriage. Presumably, in a bid to win her over, Sharp provided Kosmalski with access to her bank accounts; made her his sole beneficiary under his will. Eventually, Sharp gave up all his interest in the farm, his most important material possession, in favour of Kosmalski, and seemed to stay on as ‘life-tenant.’ But the relationship came to a sad end shortly thereafter, with Kosmalski evicting Sharp from his home, leaving him with assets of about $300.
Sharp then brought a claim for the imposition of a constructive trust upon the farm and other properties that he had conveyed to Kosmalski, arguing that Kosmalski’s retention of those properties and her eviction of Sharp led her to be ‘unjustly enriched,’ as she had breached ‘a relationship of trust and confidence’. The claim was upheld by a narrow majority, on the basis that the conveyance ought not to be regarded ‘literally or irrespective of its setting, but sensibly and broadly with all its human implications”
There was, according to the majority, scope for an equitable intervention in the case because it was ‘a transaction pregnant with opportunity for abuse and unfairness…’
The majority did not clearly explain what made the possibility of abuse so palpable: it proceeded on the assumption that the relationship between the parties was a confidential relationship, making Sharp worthy of protection. It does seem clear that the Court had some notion that Kosmalski, had taken advantage of Sharp; or that she had wronged him in some manner.
And this brings us to the central point. The narrow legal rules of conveyancing are examined within the broader context of the moral duties that the parties owed each other; and those moral duties appeared to control how the court of equity was to regard legal duties or otherwise give effect to them. And if equitable interventions regard the strict rules that apply in a given case as being hemmed in by certain ethical precepts under certain circumstances, there must also be the presence of certain ‘meta-rules’ which govern the scope of such equitable interventions.
Further, if we agree with the disposition of the appeal in Kosmalski, it also has to be said that the majority’s approach seems to raise three separate concerns.
First, the problem is in identifying those circumstances when those meta-rules are triggered and brought into operation: it should be obvious that not every single conceivable transaction should enable the Court to undertake a detailed inquiry into the background context. This issue will be discussed a little later on.
Second, the problem is in fleshing out those meta-rules in any given case. If it is true that the rules of conveyance are hemmed in by the background context, there must be some mechanism which that context can be easily assimilated into adjudicatory process.
Third, the Court must also take pains to ensure that the mechanism is not complex: it must have the benefit of simplicity, if only for the sake of easy justifiability. It is possible that the more complex the mechanism that is conjured up by the Court ‘ and the Court does seem to be conjuring up principles in the absence of clear statutory backing ‘ the more it seems to lack legitimacy. We may address the second and third points here.

D. The pattern of moral duties

The only manner in which the relationship between Kosmalski and Sharp ought to be understood in equity, I would submit, is by according some recognition to the existing pattern of moral obligations between the parties. The consequence of this is also that strict legal rules would not be given full effect, if that pattern is going to be violently disturbed. Sharp trusted Kosmalski and had acted on that trust. And Kosmalski, having benefitted from that trust, could not resile from it: choosing to take advantage of it for certain purposes while ignoring the responsibilities that come with it. It is also interesting that stress is laid both on Sharp’s being recently widowed and his comparatively minimal formal education and on Kosmalski’s youth and education. In a sense, Kosmalski, enjoying Sharp’s trust, was under a greater obligation of care, than she might have been, if he had been educated, more independent and not quite so vulnerable. More strikingly (although implicitly), the majority appeared to have been focusing on Sharp’s lack of guile and, although this might seem cruel to add, his relative lack of sophistication: he had imagined that Kosmalski would have married him, if only he gave her all his wealth. This made him vulnerable, and Kosmalski was morally obliged not to take advantage of him.
One of the benefits of theorizing about equitable interventions in this manner ‘ i.e., stressing the pre-existing moral obligations between the parties ‘ is that we may perhaps arrive at what are the most quintessential developments in equity, as opposed to the common law: the fact that its orders operated in personam rather than in rem. Most commentators, who insisted on the distinctive character of equity, laid enormous stress on this in personam nature of equitable orders. Ames made this argument the primary exhibit of equity’s perceived moral advancement over the common law:
‘Equity lays the stress upon the duty of the defendant, and decrees that he do or refrain from doing a certain thing because he ought to act or forbear. It is because of this emphasis upon the defendant’s duty that equity is so much more ethical than law.’
This kind of an argument is somehow circular. But it is unnecessary to multiply authorities on this point. Suffice it to say that equitable orders operated in personam on the basis that it was the conscience of the defendant that was bound in equity, and the specific nature of equitable orders was tightly linked with the moral reasons that compelled Courts in equity to intervene in the first place.
There are numerous advantages in theorizing equity by reference to this in personam characteristic. First, it acts as an obvious limiting principle to equitable intervention, and I shall have more to say about this later. Second, equitable intervention is sensitive to the situation and the context that persons find themselves in. There is recognition that the moral duties of persons are often shaped by the position in which persons find themselves with regard to others; and there is acknowledgment that moral duties are not uniform and might be more demanding or relaxed depending on what the circumstances require. Third, equitable intervention is also sensitive to the persons involved in the transaction; and it makes a concession that not all persons finding themselves in the same situation would owe the same kinds of duties to others. All this gives equitable interventions a nuanced character which promotes an ethically oriented decision-making process.
Kosmalski, in view of her position of trust and confidence with Sharp, was obliged to perform certain obligations to him that would certainly not be required of third parties who were not similarly placed. Her moral duties were much more demanding than those of strangers.
I cannot resist adding a digression here. It is interesting that, historically speaking, equity also seemed to recognize some moral duties even on the part of strangers when dealing with vulnerable persons. Paul Vinogradoff, in a classic essay on equity’s roots in reason and conscience, provides an illustration of one characteristic ‘application of conscience in equity Courts’ in the middle of the fifteenth century. In 1467, the Chancellor in equity (Bishop Stillington) gave relief over the objections of the defendant who had argued that the plaintiff was in effect reaping the rewards of his own folly by ignoring the relevant rules of covenants. The Chancellor justified granting relief on the maxim ‘God acts as attorney to foolish people.’
Vinogradoff points out that this maxim was applied by the courts of equity to address the problems of what we now refer to as sharp dealing: people who take advantage of others who suffer from ‘weakness of intellect, insufficient knowledge and casual negligence.’ These problems also animate recent writings on equity by Professor Henry Smith and Professor Carol Rose, among others, who focus on the value of equitable interventions within the law of property. Professor Rose’s discussion is founded on the distinction between rules and standards which is the subject of the discussion in the next part; but the reasons that she provides for having equitable standards may be noted here.
For Professor Rose, a ‘crystalline’ or rigidly rule based system would always be ‘mucked up’ by the cast of characters she refers to as ‘ninnies,’ ‘mopes,’ ‘hard-luck cases’ and ‘the occasional scoundrels who take advantage of them.’ According to her, enforcing strict rules under all circumstances, leads to a risk that ‘unscrupulous dealers’ would try to take advantage of this unsuspecting class of people, particularly because there is a strong possibility of windfall gains. And it is here that Professor Rose appears to find that the mud rules (or equitable standards) might be useful to prevent persons form engaging in such sharp dealing.
Professor Smith also stresses that countering opportunism is an especial function of equitable forms of decision-making. Quoting Professor Rose, he argues, ‘Greater vulnerability of the victim and greater windfalls call for flexibility [in the application of rules]’ [T]he focus is on the vulnerability of the victim. Indeed, traditionally equity has a special regard for fools”
In effect, this brings to bear the question of what moral duties we might owe others and how this shapes the content of our legal duties to the same parties. At minimum, then, we are morally obliged not to take advantage of the weaknesses and the vulnerabilities of others. Leaving to one side for a moment, the question of why this obligation might arise, we will simply take it for granted that this obligation does in fact exist, and can be defined as the obligation from ‘general concern’. Equity adds a superstructure to this obligation: it requires people evince this concern at the very least, and permits this principle for general concern to be brought up as an equitable defense and imposes sanctions on those that violate it.
Another historical illustration is perhaps apt. In the 1822 case of Seymour v. Delancey, the question was whether specific performance ought to be ordered on an agreement to sell land. There were several things problematic about that agreement: for one thing, it was obvious that the sale price was inadequate, but Chancellor Kent, who decided the issue, decided that this was by itself insufficient to set aside the contract, although it was one factor for refusing specific performance. And he refused to direct specific performance because, among other things, the seller of the land (who had since died) was habitually intoxicated during the last years of his life, making him unfit for taking sound business decisions. Implicitly, the idea is that the buyer appeared to have taken advantage of a person who was widely known to have been abusing alcohol, securing a contract price that fell well short of adequate. Kent made it a point of stressing the importance of discretion guiding equity courts in such matters; he also pointed to other defaults committed by the buyer for refusing the decree sought for.
We can interpret the philosophical basis for Kent’s judgment as founded on general concern owed by the buyer to the seller, and the buyer’s violation of this moral obligation disentitled him to relief. And if the buyer and seller were more intimately known to each other, or if the buyer was in a position of trust, then the moral obligation would be correspondingly more demanding.
Another interesting illustration of this principle for concern is Patel v. Ali. Unlike Delancey, this principle came into operation not at the moment of initial contact between the parties, but a little later on. It was another contract for sale of property ‘ an apartment in which the sellers lived ‘ but in respect of which the Court refused to grant an order of specific performance. The Court placed significant weight on the fact that the seller had the misfortune of developing cancer before the contract could be performed. The resulting treatment led to the amputation of her leg, which made it impossible to navigate outside her home or to attend to her children without heavily relying on, as it were, the kindness of neighbours. To compound the problem, she spoke little English; her husband declared bankruptcy and repeatedly went to prison. Her argument ‘ which the Court accepted ‘ was that by selling her home and moving elsewhere, she would be subjected to undue hardship, because she would be deprived of the daily assistance from the closely-knit neighbouring community that was essential for meeting the requirements of her domestic life.
Two further digressions are perhaps inescapable at this point. First, although equity is generally regarded as being organized around ‘unconscionability’ and ‘opportunism,’ those definitions sit uneasily with the facts of this case, where both the parties were admittedly innocent. Second, the decision seems recognize this defense against the grant of an equitable order: when circumstances make it such that seeking an order might be seen to violate the principle for general concern, equity would refuse such an order.
Without belaboring the point, it seems clear that equity lays heavy emphasis on existing moral norms between parties which gives shape to their legal relationships; and equitable interventions should not be seen as separate from this moral foundation.
Although this is taking us a little farther afield than is required by the scope of this paper, it seems clear that moral relationships that are the basis of equitable intervention can also exist in weaker forms in transactions between strangers.

II. Equitable Interventions: Rules against Standards

A. An overview

If equity requires persons to evince concern for those who are under some special disadvantage or possess some vulnerability, equity must also operate in a manner that brings such issues to the fore. Now, it is well-known that equity largely ‘ although not always ‘ operates through the use of standards rather than rules. I will try to elaborate some reasons for equity’s reliance on standards. I will also point out that equity’s standards are especially valuable when they operate on the intersection of two legal rules.
The now-familiar distinction between rules and standards has a vast literature. The best illustration of the difference between a rule and a standard is a signpost on the highway requires that drivers not exceed the speed limit of 60 miles per hour as opposed to a sign which simply exhorts drivers to exercise due care and drive safely.
The reason that equity operates through standards is not far to seek. Standards naturally seem to promote ‘substantive fairness’: while rule-based adjudication ‘suppresses relevant similarities and differences; standards allow decision-makers to treat like cases that are substantively alike’.
For Professor Kennedy, in his classic article on ‘Form and Substance in Private Law Adjudication,’ common law forms of adjudication were inherently incoherent and seemed to be alternately attracted to the extremes of individualism and altruism. Bright line legal rules appeared to promoted individualism and selfishness in legal actors; the enforcement of equitable standards ‘ more indeterminate and context-dependent ‘ seemed to promote altruism.
In an equally classic article entitled ‘Crystals and Mud in Property Law,’ Professor Rose, following Professor Kennedy in a sense, argued for conceiving the position of equity in the legal system as cyclical. Her thesis was made in the context of the law of property; and she had in mind the nature of emphasis laid by the courts on enforcing property rules. For Professor Rose, there has always been a perennial struggle in adjudication between enforcing bright line rules (what she calls ‘crystals’) in property law and interposing ‘muddier’ standards whenever those ‘crystals’ produced harsh or unjust results. This replacement of crystals with mud and vice-versa is, she argued, cyclical and represents one of the central tensions in common law: there are periods with which one associates the rise of ‘crystals’ or ‘mud’, often depending on the nature of the commerce transacted during that time. Her account therefore, restores equity to a more prominent place in shaping property law as we understand it today.
In this paper, we shall explore other uses for standards or ‘mud’ rules in equitable forms of decision-making.
To return to the formulation of rules against standards ‘ and to the illustration of a rule as a sign on the road that sets out the speed limit as 60mph, and of a standard as an exhortation to drivers to ‘drive responsibly’: standards have no independent content: they take their flesh and meaning from the context in which they are set. Louis Kaplow, for instance, in a well-known article, making an economic analysis of rules against standards, made this interesting point: rules have greater transaction costs at the time they are made (ex ante) but entail few transaction costs when applied by the court, after an event in question (in a determination of whether a driver violated the traffic law). And it is exactly the reverse for standards: there are now greater ex post transactions costs in the adjudicatory process, although there are few transaction costs involved in framing a standard.
So a legislative committee could have made a detailed examination of the proper rule to be applied on a road and set the speed limit: and to this degree, courts are free from the responsibility of delving any further into the background context. In the process of adjudication, only a small sliver of the context surrounding the application of the law peeps in: the rest is silently disregarded. But does a ‘drive responsibly’ standard does apply in the same fashion to a large truck, an ambulance, a motorbike; to a highway running in a desert, a city thoroughfare and a school zone? Well, that is for the court, in its ex post analysis of the facts, to decide.
Let us take another example (and this is only one the many examples where equitable standards could attain significance in religious freedom cases). A school in a multicultural society has to prescribe a dress code for its pupils. If the school is willing to be responsive the existence of diversity in the district to which it caters, then I would submit that the school would resort to standards over rules. Rather than requiring male students to wear shirts and trousers, and female students to wear skirts, with little leeway for children to don their religious attire, the school could recognize some differences as legitimate and simply frame the regulations as requiring students to dress in a dignified fashion. This could allow the child of Sikh faith to wear his turban, the child of Muslim faith to wear her headscarf, and the child of Christian faith to wear her cross. Of course, this could be framed as a rule with several exceptions. But this is what is important about rules: when rules are made, the frame of reference, as broad as it might have been, is fixed; and unless the rule is amended, the frame cannot be expanded. So, the rule of the sort described might still be applied, without causing undue discomfort or distress to the citizens, in a multi-cultural society which now imposes a ban on future immigration. But if persons of different faiths and beliefs keep migrating to the school district, the rule quickly loses its utility: or at least, there can be no illusion that it applies to everyone in the same fashion; or the regulations evince equal concern for all of them.
The thrust of this diversion simply to illustrate the most important aspect about the standard: that it responds to pluralism. The point of the school regulation is, of course, to embrace the possibility of a pluralism of values. But there could be other kinds of pluralism which might be equally relevant when laws are being applied: diversity in the persons that are regulated by law (for instance, should the doctrine of vicarious liability applying to a for-profit corporation be extended to apply in exactly the same fashion for charitable organizations?); diversity in material circumstances of persons (does ‘merit’ for admission to law school mean the same thing that it does to an affluent white student educated at an Ivy League college as it does to an African-American student from impoverished circumstances who has been educated all black schools and college?). In the latter example, nothing of the context is taken into account if ‘merit’ is simply defined as securing a particular score on the LSAT. But if some concern is to be accorded to everyone, then the law must respond the pluralism and the diversity among the persons who are being affected by the rule.
But let us linger a moment on the problem of framing. The crucial point to be emphasized is that standards encourage pluralism not just of the sort demanded by extra-legal notions: standards also resolve problems engendered by the application of a proliferating mass of laws. Standards make it possible to reconcile different areas of the law, which, when the law is cast merely as a set of rules, it would be unable to do.
If we were to speak of general laws governing contracts, we would undoubtedly make reference to a set of rules: parties entering into the relationship would have attained majority; be of sound mind; with some consideration moving from one party to another. Now, these rules winnow down the context considerably. So, ordinarily, given the small frames given to the court for assessing the parties’ capacity to contract, it makes little difference if those parties were classmates from kindergarten or if they contracted immediately upon meeting on the floor of a stock exchange for the first time. And there are few reasons why we would want to treat every relationship differently for simply assessing capacity to contract. But being classmates in school for twelve years does not constitute a legal institution. The problem naturally arises when one rule appears to implicate another rule or institution.
Assume, for a moment, that upon marriage, the wife, transfers all her property unilaterally to the husband, without receiving any consideration. Ordinarily, the Court would presume that the wife continues to be the owner of that property, with the husband holding it on trust. Presumptions like these would be strengthened if it is shown that, upon divorce, the wife is left without any property at all. In short, the parties, who having entered into an existing legal institution of marriage, are not ordinary legal actors when they decide to enter into a contract. But the problem with the narrow framing approach of rules to contract matters is that courts would not be able to make distinctions between transactions which implicate other legal institutions and those transactions which do not.
If law-as-rules arranged the world into a series of discrete packets, operating separate from one another, then the intersection of two rules would cause considerable problems. To address this intersection, every rule would have to refer to every other rule in the system: and the sheer mass of this cross-reference would bring everything to a collapse. In other words, every contract statute or every municipal zoning regulation would grow to resemble massive tax codes (which are in fact largely burdensome because they have to refer to a swarm of other rules). Which brings us to the next point.

B. Standard over Rule: The Nodal Argument

Standards make it possible to reconcile those problems arising from persons governed simultaneously by several legal institutions. Of course, this says nothing at all about the content of the standard. It simply illustrates why resort to equity-as-standards might be seen as justifiable under certain circumstances.
So, a standard might be interposed at the intersection of two legal institutions designed largely as a body of rules (of marriage and of property conveyancing), particularly when it results in disproportionate hardship to one of the parties at the expense of the other. Let us refer to the intersection between two rules as ‘nodes’: and the argument for imposing standards to give priority to one rule over another, as the ‘nodal argument’.
Incidentally, the argument for imposing standards on the functioning of rules is not restricted to the institution of marriage alone. Other relationships that equity characterizes as ‘fiduciary’ are the ones between a lawyer and client, guardian and ward, parent and child, etc. In these kinds of relationships, there is a clear imbalance of power between the parties which leaves open the possibility of abuse when ordinary force of rules is given effect to.
But perhaps the best illustration of this ‘nodal argument’ is what Professor Smith refers to as an ”’ber-chestnut’: Riggs v. Palmer. In that case, Francis Palmer, a widower, had made a will, in which he made several bequests to his daughters, but with a large portion of the estate bequeathed to his grandson, Elmer. As it happened, two years after this will was made, the grandfather re-married, and initiated steps to amend the will to favour his wife. Before Francis could do so, however, Elmer poisoned his grandfather. But New York’s law of inheritance did not have any explicit provision which disentitled murderers from inheriting from their act of murder. The question was whether title to the estate under the will could pass to Elmer. The court, by a majority, rejected Elmer’s claim to the estate, holding that he could not inherit from his crime.
The ‘nodal argument’ here should be readily apparent. There were two sets of rules ‘ the law governing homicide and the law governing inheritance ‘ which were triggered by the same act ‘ the death of the grandfather. And it might be possible that those rules had an internal coherence of their own, but each set of rules possessed narrow frames of reference. And if those rules simultaneously punished Elmer for his crime of murder and permitted him to keep the bequest under the will, there would not necessarily a contradiction between the rules themselves; it would simply be an acknowledgement that they operated in different spheres.
But such a result would appear spectacularly arbitrary from the point of view of the legal actors who are governed by both those rules. This is obviously because the legal system is perceived as a unified whole by those legal actors, and not as a set of discrete rules with narrow frames of reference with conflicting priorities. And it is precisely in such instances that equity would impose a standard on those intersections between discrete rules which appear to be drawn towards conflicting aims.

C. Equity’s Comparative Model

The possible objection to applying standards over rules is that persons who are governed by the same norm would be treated differently under standards. As a result of this, the argument goes, one cannot arrange one’s conduct in accordance with a norm without being entirely sure how the norm is likely to be applied. I cannot be sure, for instance, that I will be treated the same way that my neighbor is being treated, or if I will be placed within an entirely different category by myself for the purpose of analogous acts. And this would appear to violate the requirement for equal treatment that is normally guaranteed in most liberal democratic Constitutions. If a norm, N, applies to all transactions of a certain kind, ‘N’ must also apply to all persons who engage in that transaction. If everyone is bound by ‘N’, then I cannot claim to be exempt from its operation (or be deprived of its benefits).
But it also raises a second point that is related but also somewhat different. Application of standards might also invite favoritism as between the specific parties in a particular dispute. The application of a norm in a way that is adverse to me (which is possible with a standard, and less so with a rule) might not only rob me of the benefits that I am entitled to as a general matter: it would also give an advantage to my opponent over me.
There is little doubt that equity does just this. The application of equitable doctrines is fact dependent; and it seems to be motivated by the ‘conscience’ of the defendant (and, in certain cases, of the plaintiff). If equity is legitimate, then there must be good reasons for showing such selective and potentially discriminatory administration of norms.
This brings us to Professor Henry Smith’s contribution to this discussion, which has been to provide ‘a functional theory of equity’ as a decision-making mode aimed at countering opportunism.’
For Professor Smith, equity’s primary function is to deter opportunists from abusing ‘the structures of the law’. Professor Smith’s argument, founded on an economic analysis of the law, is essentially that the law that consists of prospective rules (ex ante) creates broad structures that give rise to the possibility of exploitation and abuse on the part of those it governs. People might conform to the letter of the rules, but, in doing so, they might carefully evade conforming to the ‘spirit’ of the law. Human ingenuity is such that the forms in which people might try to evade the purpose of the law are (nearly) infinite. So, it is not always possible to anticipate and curb every sort of ‘undesirable behavior.’ Professor Smith’s conception of equity, therefore, is self-consciously narrow: equity is described as parasitic on the law (i.e., it could not exist without the law, and merely constitutes a gloss on it); and it is a system that uses ‘proxies and presumptions’ which is open-ended and principally founded on notions of ‘morality, good faith, and notice.’ Under these circumstances, equity’s lack of predictability is a virtue, (in contradistinction, I suppose, to its characterization as an affront to the notion of the rule of law) and enables courts to give effect to the substance of laws, rather than merely be beholden to the form in which the laws are set out.
The concept of ‘opportunism’ can be illustrated by the familiar example of tax evasion. Let us suppose that a provision in the tax code provides that domestic companies can claim exemption from paying taxes to the extent that their domestic income is sent to subsidiary companies overseas. If a company devices an elaborate scheme in order that the domestic earnings are routed overseas but eventually returned to the parent company, then this might be the opportunistic behavior that Professor Smith has in mind. And this is something that equity can legitimately thwart.
If we were to re-phrase Professor Smith’s definition of opportunism for the purposes of the comparative model, we could call this as the problem from false categorization. In other words, rule ‘N’ provides that one class of companies that do not send their income abroad constitute one class (class ‘X’) and they are to be accorded one kind of treatment (‘Tx’), viz., they must pay taxes on their income; but that another class of companies (class ‘Y’) are to be accorded a different kind of treatment (‘Ty’) which is that they need not pay taxes to the extent of their income that they send to their subsidiaries abroad. So, a company, ‘C’ that adopts a fraudulent tax evasion scheme of routing its income through shell companies and bringing them back for domestic use, appears to fall within class ‘Y’, but really falls within class ‘X’.
And this brings me to the most important point: inquiring into the class that the company belongs to is essentially a function of the frame that we use to analyze the transaction. If we confine ourselves to the mere act of ‘C’ transferring some of its income abroad, then, of course it belongs to class ‘Y’ rather than ‘X’. But the wider the frame, the more facetious is the contention that ‘C’ ought to be accorded treatment Ty rather than Tx. It is facile to speak of equality in the application of the relevant rule without first clearly defining how much of the context we need to take into account: and the answer will always depend on that background context.
But rules, as we have seen, leave very little of that context up for judicial examination ‘ so the fact that standards seem to require different results than rules is indicative of nothing. From the perspective of a person favoring standards over rules, rules are also open to the objection that they treat distinct cases alike. This is also generally the objection to programs like affirmative action for admission to colleges: if we consider that students are to be selected on the criterion of merit, then they might legitimately treat students who are alike for the purpose of a rule (students who have the same scores) differently under a standard (minority candidates with that score might be admitted, but non-minority students might not). But expanding the frame shows that students who score similarly are not, in fact alike, and must be treated differently.
In other words, this is a strong reason for concluding that rules and standards are fundamentally incommensurate.

D. The Ethical Quality of Standards

Next, I want to address some reasons why the use of standards over rules might be preferable under some circumstances. The best way to do this is try to refute some well-known criticisms offered on standards and the discretion-centered approach.
The late Justice Antonin Scalia was possibly the most vocal exponent of the desirability of rules in the legal system. In his Oliver Wendell Holmes lecture at Harvard Law School delivered a quarter of a century ago, Scalia said that as a young man, he had preferred an approach that construed the rulings of courts narrowly, lending future courts greater discretion to do justice in individual cases.
But thereafter, he seemed to imply, he put aside such foolish things. ‘The Equal Protection Clause,’ he continued ‘epitomizes justice more than any other provision of the Constitution. And the trouble with the discretion-conferring approach to judicial law making is that it does not satisfy this sense of justice very well.’
Scalia’s defense of the importance of the equal protection clause should strike us as especially ironic, considering how narrowly he would construe it later on in his career. But, as we have seen, the argument from the clause is unconvincing. In fact, the opposite is true: one could easily conceive of a system of rules which left no room for discretion that would nonetheless be in grave violation of the clause. This is what John Rawls referred to as instances of ‘pure procedural justice’: processes in which there is no independent criterion ascertaining if the result is ‘just’ or ‘unjust’: ‘instead there is a correct or fair procedure such that the outcome is likewise correct or fair, whatever it is, provided that the procedure has been properly followed” The examples that Rawls gives for this category are gambling or the lottery.
Of course, one might argue that this is being grotesquely unfair to Justice Scalia and those like him who put forth the tautology that ‘the rule of law is a law of rules’ as a maxim of self-evident verity. I think the maxim is self-evidently meaningless. This is not, of course, to say that Justice Scalia would have endorsed the idea that criminal defendants could be convicted on the result of a coin-toss. Rather ‘ and this illustrates the strong preference expressed by the scholars associated with the Critical Legal Studies movement, particularly Professor Duncan Kennedy and Professor Morton Horwitz, for standards over rules ‘ this is merely to suggest that there is nothing inherently moral or ethical about rules. The procedure for resolution by coin toss is merely an example of a rule whose frame is miniscule: nothing of the outside world, save the structure of the coin and the laws of physics, is made relevant for such determinations. A coin toss (or the roll of dice) is therefore both the embodiment of perfect fairness as detachment and a manifestation of grotesque injustice.
In that case, what it is that makes standards more moral and more ethical than rules? Some of the reasons have already been suggested in the preceding section. Broadly speaking, there are ex ante and ex post problems to rules that standards resolve.
The ex-ante part of it is that rules are not very responsive to pluralism. Laws that consist of seemingly neutrally drawn rules have a tendency to negate the principle of equal concern and respect shown by the State to its citizens who seem to fall outside the general norm: in other words, precisely the sort of persons who ought to be protected by the State. For instance, apartment rules that require that tenants not keep pets might seem to be a perfectly innocuous and neutral norm: but it is clearly discriminatory to those persons who are disabled, who require the assistance of trained dogs. A more egregious instance of this seemingly neutrally tailored, but patently discriminatory, rule was the law that was recently enacted in France which prohibited persons in public places from wearing clothing that are designed to conceal the face. It was a clear instance of Islamophobia, aimed at suppressing the religious expression of the women of a highly vulnerable minority. Rules make it easier to disguise reprehensible laws in seemingly neutral form.
The ex post problem with rules is similar: they assume that everyone who encounters the rule does so in identical ways. So if a rule that prescribes that the candidates for a fellowship program report for interview on a particular day, it would disentitle everyone who did not so show up. This is so even if, to cite an example of what had happened to a colleague of mine recently, she was prevented from reporting on time because a natural disaster had disrupted all transportation services for weeks.
In short, the legal system that is merely embodied as a system of rules does not conceive the enormous richness and the complexity of our lives: we are instead flattened out. One or two strands of our lives are singled out for inspection instead for deciding whether we have interacted with the legal institution in an appropriate manner.
My central argument here is that morality is impossible if the actions of legal actors are not viewed within a capacious space. And the very act of perceiving people within their respective sphere of action, the recognition and acknowledgement of the environment that legal actors find themselves in, is itself a worthwhile moral act that is a good in itself. And it is precisely the reduction of persons to slivers of being, who appear to interact with the legal system in virtually abstract terms, which should strike as morally dubious, if not offensive.
To return for a moment to Scalia’s lecture, he makes two further arguments, which are important for our discussion. The first argument is that the discretion-centered approach would make a judge ‘resemble a finder of fact more than a determiner of law,’ which would amount to a ‘regrettable concession of defeat’. This is excessively dismissive of standards, but it is worth noting how Scalia creates a false dichotomy here. According to him, judges, particularly appellate judges, are in the business of declaring the law, but not embarking on expeditions into fact. But it might well be argued that issuing carefully worded injunctions in equity to control the future behavior of parties in various circumstances requires at least as much dexterity as, for instance, engaging in construction of an ambiguous phrase in a statute.
The second argument is fascinatingly counter-intuitive ‘ ‘The chances that frail men and women will stand up to their unpleasant duty are greatly increased if they can stand behind the solid shield of a firm, clear principle enunciated in earlier cases.’
In other words, the value of having bright-line legal rules, for Scalia, is that it would make it easier for judges to make deeply unpopular decisions, than if those judges had to rely on standards. This is also Professor Rose’s point in the most rousing and evocative passages of her famous article, which I cannot resist quoting here:
‘[T]he language of crystal rules sometimes conveys a kind of sturdiness that, at least in our culture, suggests a very important social virtue: namely, courage’ One can envision’ the pioneer woman who, armed and ready, turns away the intruders at the threshold of her homestead cottage, or the tavern owners who refuse all offers to give up their little establishment and instead force the giant office building to be built around them and their happy customers.’
This is an argument of considerable force, which is very difficult to refute. But by way of contrast, we may perhaps make reference to a fascinating recent article by Professor Seana Shiffrin. Professor Shiffrin revisiting this problem of rules and standards, powerfully argued that the cloudy forms of standards seem to elicit legal actors’ moral deliberation in a manner that the shiny bright lights of rules do not. Her criticism of rules is that they make us into automatons ‘ rather than engaging with the situation around us, we are content to lean back against the safety of rules, ‘falsely secure in the sense that we are nested in a set of complex rules whose execution guarantees our safety.’ By contrast, standards are construed as provoking a degree of self-questioning on the part of the same legal actors, confronting problems of whether their conduct meets the requirement of reasonableness and fairness: more importantly, they also raise the issue of these actors forcing themselves to see their behavior, as they would be perceived by the other party. The illustration that Professor Shiffrin gives is of the collective setting of the workplace, where employees and employers would deliberate on the manner in which the office ensures a safe and ‘non-hostile’ atmosphere to those working there. Professor Shiffrin also envisions a similar model in other collective settings: in juries, associations, and the ‘shared spaces’ of the media. And she celebrates a society that primarily, although not entirely, relies on standards: a participatory democracy that promotes in decentralized forms of decision-making.
Professor Shiffrin’s somewhat idyllic vision of society could not be more different from Scalia’s. I suppose that this is hardly surprising, considering Scalia is obsessed with constraining the adjudicatory process, and therefore appears to assume that the worst might happen at any moment. It would be possible, he says, for juries to punish criminal defendants they dislike if they were to engage with free-floating standards were deployed: rules, therefore, are essential.
Again, it is impossible not to concede the force of Scalia’s and Professor Rose’s argument in certain cases ‘ as in the case of juries acting in a racially motivated way. But Professor Shiffrin takes care not to argue that standards have the potential of ameliorating every kind of problem, so there is not necessarily a contradiction here.
At any rate, it is also important to stress that the morality of standards as opposed to rules is essentially relative. Rules designed to exclude as many facts about the external world as possible might seem dubious for resolving matters of high stakes. But a coin toss to determine which of two equally qualified candidates is to be selected for a job is still fair, assuming that the alternative is an expansive frame that enables the employer to select on the basis of sexual attractiveness or racial characteristics.
The morality of standards, for that reason, is evinced only when those standards can be used to examine actions that are morally relevant: the factors that standards adjudge relevant cannot be arbitrary from a moral point of view. And this goes back to the previous discussion on framing: equity broader framing approach encompasses those features in the relationship that are somehow salient from a moral point of view.

III. Some Justifications for Equitable Interventions

This paper has made two connected arguments so far. First, equitable interventions are premised on the idea that persons sometimes owe a duty have evince some degree of concern for others, particularly when dealing with those who are under some special disadvantage or vulnerability. In addition, equity compels persons to act according to this duty, if they seem to disregard it, or otherwise sanctions their violation of this duty. Second, equity softens the administration of the law, if giving effect to strict and thinly defined legal rules seem to violate this principle of concern, or when the application of such rules seem to result in disproportionate hardship to persons who, again, suffer from some weakness or disadvantage. I will now try to provide some reasons for having such a mechanism for equitable interventions in place.

A. Justification by Digression

This would be the first and most obvious question: what do we gain by bringing the application of legal rules closer to pre-existing moral norms?
To answer this question, we must first analyze and critique a fascinating recent account on equity that has been put forth by Professor Samuel Bray. Professor Bray’s account is valuable because he is one of the few prominent scholars working at present in the field of equity in the US. He begins by pointing out that the jurisprudence on equity was not developed systematically, but merely in opposition to those developments at common law. This development of doctrine from an unsystematic and irregular collection of decrees ‘ although this is my characterization, not Professor Bray’s ‘ meant that equity could not be formally categorized as a system when discussing substantive rights. As he puts it, ‘there was no connection between the fact that a nineteenth-century court of equity refused to enforce a penalty clause in a contract, and the fact that it would protect real property against a repeated trespass.’
Professor Bray is not alone in contending this. Attempts at systematizing equity have always met with dismal failure. Holdsworth seemed to be aware of this, when he said, ‘Continuity is the characteristic feature of history of the common law. An absence of continuity is the characteristic feature of the early history of our system of equity.’
Paul Vinogradoff also seemed to concur: the Chancery was preoccupied with matters of conscience in crafting equitable remedies, protecting confidential transactions and the enforcement of promises despite the failure to adhere to legal formalities. However, he continued:
‘There were other points about the equity jurisdiction of the Chancery ‘ for example the greater laxity as to certainty of claims, the putting down of maintenance, discovery in procedure etc., ‘ but they proceeded from other points of view than that of conscience”
In other words, not every doctrine or procedure that was developed at the Chancery grew out of the embryo of ‘conscience.’
But to return to Professor Bray: he argues that remedies prescribed at equity really do come together as a system. They constitute for him a body of doctrine with ‘a number of interlocking components.’ He identifies them as (1) the procedural remedies in question; (2) the so-called ‘managerial constraints’ (orders to enforce procedural orders with contempt, or modifying or dissolving them where necessary) and (3) ‘special equitable constraints’ (such as doctrines restricting the standing to bring claims at equity and defenses afforded to the defendants against certain undesirable conduct by the plaintiff).
In Professor Bray’s careful thesis (which requires a more detailed critique than is possible here), omission about equity’s role in common law system is significant. To argue that equitable remedies constitute a unique system ‘ as opposed to a system shared with the common law ‘ is to considerably underplay the importance of equity in giving effect to legal norms. In fact, the role of equity becomes most significant when it appears to be counteracting or opposing certain common law doctrines: it is here that we can detect the starkest conflict between law and morality, and how they interact with each other. For instance, Hohfeld in the most authoritative treatment on the subject repeatedly emphasized that significance of equity’s role in supplementing and strengthening legal norms. It is, for example, impossible to accord proper consideration of equitable defenses without an appropriate weight being placed on the larger question of equity’s relationship with the law.
And this is also the major failure in recent scholarship because it fails to consider equity in relation to the law. Professor Bray’s account, for instance, is certainly vulnerable to the charge that it makes equity seem overtly solipsistic, engaging purely with its own doctrines rather than with the common law more generally: an account that is somewhat misleading.
But equity’s peculiar force and its utility become more obvious when it is brought in counterpoint to legal rules; and the conditions attending in which legal rules are brought into effect. Take an instance where X, on her death-bed, appears to bequeath her entire property to her doctor, ignoring the interests of her children and family. For the reasons too obviously linked with the nature of that relationship itself, contract rules that might protect the parties, if strangers were so transacting, would simply lose their utility in such circumstances. As a consequence, much of the built-in mechanisms of contract law protecting the parties fail to operate, with the result that one party begins (or ends up) at a significant disadvantage. Equity’s context-driven adjudication can ensure analogous protections: it can invalidate a one-sided contract by making presumptions in favour of disclosure or of undue influence. Under certain circumstances, acknowledging the factual background around the legal transaction can better serve the rules governing that transaction. In short, ‘equity strengthens the law by not following its letter.’

B. Justification by Design

But there is another, deeper reason for wishing that equity, or some other part of the legal system, acknowledge this mass of complexity of our lives that the law governs. As Pound wrote,

‘[a] judicial decision [cannot] ignore’ special aspects [of a case] and exclude all individualization in application without sacrificing the social interest in the individual life through making justice too wooden and mechanical.’

First, the law must be responsive to the needs of those that it governs: mere systematic application of legal categories into which our lives are squeezed into, seems to place and unjustified distance between the law and our lives. This is the critique from the standpoint that the law must be closer to our lived experience if it is not to lose its utility and value. This respects the perspective of the legal actors themselves rather merely approach the legal system from the perspective of an external designers. The argument is that the law must, to retain legitimacy in the eyes of these legal actors, maintain a kind of regard for pre-existing moral duties and expectations with which people navigate through their lives.
Second, equity serves to reduce the sort of conflict between that the application of two strict legal rules in a given case might bring about. The institution of law as a set of rules could be perfectly coherent from the external point of view: even if we can be skeptical if this is actually the case. But the context which rules typically operate in is very narrow. The moments in one’s life that the one set of rules apply pressure on are closed off from other moments that are relevant for another set of rules. Riggs v. Palmer is still an excellent example. If the minority view in that case had prevailed, it would have been a triumph of the internal coherence of rules governing inheritance and the rules governing the criminal act of murder, which, like parallel lines, did not appear to meet, even if their operation had been triggered by the same fact. So the cumulative impact of those rules can seem very arbitrary from the point of view of those who are affected by them. And there is nothing more fatal to the legal system as an institution, if outwardly logical norms create such injustices that would have citizens rail against the law much like King Lear railing against the injustices of life itself. Coherence in the law is, of course, important, if that can ever be achieved, but it is not a laudable goal at the cost of appearing irrational and arbitrary from the perspective of the legal actors.
Third, we find in the writings of those like Professor Lawrence Solum and Professor Martha Nussbaum strong arguments on the proper function of judicial adjudication based on virtue ethics and mercy, rather than a form of justice that assures unbending adherence to the mechanical application of legal rules. It is striking that both of them rely on Aristotle and his conception of equity to make a case of equity’s continuing relevance in the legal system of today. As Professor Solum points out:

‘Aristotle’s view of moral perception is key to understanding his conception of equity. Equity is the tailoring of the law to the demands of the particular situation. For this reason, equity can (or should) be done only by a phronimos, a judge with moral and legal vision. In my taxonomy, equity can (or should) only be done by an adjudicator who possesses the judicial virtues’ most particularly, the virtues of judicial wisdom and judicial integrity.’

Besides, as Professor Solum points out, if equity did not exist, then judges might be tempted to indulge in ‘interpretive practices’ in all the cases and not merely the ‘exceptional ones’ which would generally make for greater uncertainty. Thus, having equitable doctrines apply to particular cases is, according to Professor Solum, vastly preferable.
Professor Nussbaum’s superbly nuanced views on ‘the literary judge’ are by now well enough known that it needs only the briefest explanation. She makes three closely related arguments on the need for equity in the judicial system. First, there is a merit in having equity that acknowledges the ‘world of imperfect human efforts’ complex obstacles [where people] sometimes also get tripped up by ignorance, passion, poverty, bad education, or circumstantial constraints of various sort.’ And equity then becomes a heightened form of discernment, respecting someone’s demands to be seen for they really are. Second, it is also a merit for judges to exhibit a certain kind of sensitivity that sees events and circumstances from the point of view of those who faced them, rather than adopting some impersonal exercise in adjudication. She concludes: ‘[the] literary judge sees defendants as inhabitants of a complex web of circumstances, circumstances which often, in their totality, justify mitigation of blame or punishment.’
To this, I can only add it is important that equity tries to bring the administration of the law closer to these ideals, and for judicial administration to recognize that the vicissitudes of life play an important role in how legal duties are fulfilled; and to shape the legal system accordingly.

IV. Equity’s limiting principles

Now, even if we imagine equity operated to vindicate the subtle and hidden (from the perspective of the positivist legal system) the moral duties and obligations which bind us, it should also be obvious that there must exist some basic limiting principles which contain this form of intervention. Not every transaction could bring into question the moral norms which might exist between the parties; or grant a commission to the court to conduct a roving inquiry into the factual background of the case.
There is another problem: equity as predicated on moral duties is open to the criticism that its content is being pushed towards a higher degree of generality with little corresponding clarity. In other words, we are now speaking of moral, rather than legal (in the broad sense) duties, but with little more sense of what they actually mean. And if equitable duties are indeterminate, moral duties are even more so: and the definition has failed twice over.
I do not think that these criticisms are entirely without merit, because they are at least part of the reason why equity has slipped into decline. When attempts have been made at reviving equity, these criticisms are summoned up again, to testify against equity’s continued existence.
And the most damning critique on equity, from the point of the opposition, is that its indeterminacy is linked with possible violations of the rule of law. And it would be pointless to pretend that this is not a formidable argument. Holdsworth provides an account of equity’s emergence as a separate system, and it is a stark account. The Chancellor in equity was a very powerful official: he might be regarded as the King’s minister, and could sometimes (depending on his personality) even exercise the functions of the Prime Minister. And the Chancellor’s jurisdiction was ‘practically uncontrolled, for there was no appellate court’ to supervise or correct his orders. And equity was administered as a ‘loose and liberal, large and vague’ system.
It seems deeply anachronistic to impose Dicean or possibly Fullerian notions of the rule of law to the jurisprudence that was developed prior to the rise of the modern nation-state. But one can see why equity administered along these lines might be deeply troubling. And suspicion of equity has always run deep. Although equity became systematized as a formal body of doctrine towards the end of the seventeenth century, it did little to allay this lingering sense of distrust. To compound this problem, equity has traditionally been associated with aristocratic and monarchical values and notions: the English Parliament tried to (unsuccessfully) curb the powers of the Chancellor for this reason in the seventeenth century, and we see similar clashes between the chancery and the legislature in the American colonies, specifically in New York. The local politics and the colourful personalities of those involved in those intrigues may have also, of course, played a role. But it seems hard to resist the idea that something about the very nature of equity which made it an easy target for critics.
So these concerns for violations of rule of law are certainly legitimate. But they can also, in my opinion, be somewhat overstated. Equity need not be administered today the way that it was in the fifteenth century. In any event, an equitable intervention by use of a standard that upsets, as it were, the expected application of a rule in a particular case, does not give any greater problem for the legitimacy of the judicial role than a decision of a constitutional court invoking judicial review to strike down a particular legislative enactment. There is adequate literature addressing equity’s possible violation of the rule of law, so we can pass that criticism by without further comment, and focus on the charges of indeterminacy and its open-endedness.
The criticism from open-endedness is simply that if the courts were to undertake an equitable balancing exercise in every dispute, deciding whether to give effect to a particular rule in a given case or not, it would render the entire legal system superfluous.
The charge can be answered in this manner. Equitable interventions do not lend themselves for application in every circumstance: there must in fact be clear triggering facts. And this threshold inquiry can be conducted on the basis of a series of factors. More importantly, none of these factors, by itself, would be dispositive, but each of them would be given weight, and the court would then consider the totality of the circumstances. This is, in a sense, the classic approach of courts of equity, where a considerable emphasis is laid on the discretion of the court.
As Spry describes:

‘equitable discretions are exercised by taking into account all relevant matters that tend towards the justice or the injustice of granting the remedy that is sought, such as hardship, laches, unfairness, the lack of clean hands’ and by weighing them against each other in order to decide whether the particular relief that is in question should be granted in an absolute, partial or conditional form or else refused.’

The first most obvious trigger is the disproportionate hardship that would be meted out to one of the parties as a result of giving effect of a given rule. In Kosmalski, for instance, if the rule of conveyance were simply given effect ‘ and this is what the dissent in that case argued for ‘ then it would result in Sharp having been out on the streets, penniless. This is one possible outcome that courts might try to avoid, when giving effect to legal rules.
Second, the nature of the relationship between the parties to a given transaction is relevant as a trigger. As argued earlier, equity’s natural domain is in relationships that persist over a longer period of time, rather than one-off transactions between strangers. There is a sense that rules designed for short term interactions do not always apply in the ordinary way between parties that interact regularly. And this is important because it is easier in many ways to infer moral duties in such relationships than between strangers.
The third factor is founded on the assumption that not everyone encounters a particular rule in the same fashion: the starting positions of the parties might vary significantly. The presence of any special disabilities or disadvantages that one of the parties bears while entering the relationship, or otherwise suffers during the course of the relationship is therefore a relevant factor that might trigger an equitable intervention. Alternatively, the court might also take into account the fact that one of the parties had possessed or later secured a significant advantage over the other, either in terms of bargaining power or something similar, giving them dominance in that relationship, coupled with the possibility of the abuse of that dominance. This imbalance in the power between the parties is crucial.
I should add that none of the factors mentioned above are original inventions on my part: on the contrary, Professor Smith makes the point more trenchantly: ‘it is the combination of a very strange looking deal and vulnerability that makes the transaction presumptively invalid, or voidable.’
And it is important to linger on the point about presumption. The fact that a deal results in disproportionate hardship to one of the parties is certainly not a reason to refuse to give effect to it: people make bad decisions all the time, and they cannot expect to be able to resile from them when they finally arrive at such a realization. Nor is it moral for courts to lend aid to such efforts. But disproportionate hardship affecting one of the parties to a long-standing relationship should certainly seem suspicious; and this suspicion would probably harden if there is evidence of trust or confidence by the affected party, or there is an obvious power imbalance between them.
But rather than simply voiding such transactions or refusing to give effect to them, equity gives expression to its naturally reticent nature: presumptions tend to shift, burdens of proof might grow to be slightly more demanding, bona fides of the party enjoying the benefits at the expense of another, might need to be demonstrated. In short, parties who seem to violate equitable principles are called upon to explain themselves a little more at length that they might have to under strict operation of law. Equity would simply presume that the harsh consequences of giving effect to legal rules were not intended.
It is in fact partly due to equity’s enormous subversive power, and because equitable modes of decision-making (or traces of them) can pervade the entirety of the legal system that equity operates in the form of these gentler standards.
In Kosmalski, for instance, the Court could have curtailed the extent of its equitable intervention even further by simply presuming that Sharp was a life-tenant on the farm, because there were insurance documents characterizing his presence of the farm in that fashion. Or else, the Court could have inferred the consideration for the conveyance was the promise that Kosmalski would support Sharp for the rest of his life. Otherwise (although this strikes me as being somewhat implausible) the Court could have implied that Sharp retained a life-interest on the farm, with formal title passing to Kosmalski after his death. The facts narrated by the Court are very brief, but there are a variety of permutations by which the Court could have relieved to a degree the hardship which fell on Sharp, without destroying the full effect of the rules of conveyance. And this is precisely one of the more interesting ‘ and controversial ‘ aspects about equity: it does not presume that there could only ever be one method of ‘correcting’ the injustice resulting from the application of a strict rule in a given case.
In other words, we can theorize about equitable intervention on the basis that equity prevails over the law, but does not seek to displace it. Rather, we can say that equity endeavours to reinforce existing legal structures, by providing principles that will rationalize them with the moral obligations which also have a claim to us. Equity would, through modest secondary principles, avert injustice in egregious cases, particularly when giving effect to legal rules tend to upset settled moral duties and obligations.
So much for containing the process of equitable intervention. And what of the charge of indeterminacy itself?
To an extent, this problem has already been addressed in the preceding sections. If we begin by positing as minimum requirement that equity would not permit one party to take advantage of another’s vulnerabilities and weaknesses (what we referred to here as the principle of general concern), and extend this principle to long-term relationships, the moral notions guiding parties become much clearer and easier to determine. The parties with greater information in a particular case ‘ as for example, attorneys in relationship with clients ‘ are disabled from using this natural advantage to benefit themselves. This is the basis of much of the law concerning fiduciary relationships. And the fact that equity generally acts in personam is also an obvious limiting principle. It ensures that the moral duties which might be demanded of one person are not generalized against the entire world.
The moral notions which imbue relationships, especially those that attempt to counteract unfairness, are not always difficult to perceive. And this is so even if there is not always a single moral doctrine which can categorically be identified as underpinning all forms of equitable interventions.

Conclusion

The lives that we lead are rich and complex. It stands to reason that we should want the law, which governs our every endeavor, to be able to reflect this richness and complexity. Equity is founded on the principle that the interactions between legal actors are seen in a broader context. This is a call for the humanization of the judicial system, and bringing it closer to our own set of values and moral concerns; a plea for judges to adopt ‘a form of imaginative and emotional receptivity’, which recognizes ‘the tangled complexities and struggles of [our] concrete lives.’