Fusing the Equitable Function in Private Law

Abstract

Whether and to what extent we should desire the fusion of law and equity depends on the function it serves. This paper draws on systems theory to show how equity is a second-order check on the workings of the law, when complex problems such as party opportunism call for such targeted intervention. Seen from this standpoint, the substantive distinctiveness of equity is potentially valuable even if it is administered in a unified court system. Because this function has not been sufficiently recognized, fusion has been carried too far, especially in the United States. Symptoms of an under theorized excessive fusion of law and equity include multi-factor balancing tests, a polarization of formalism and contextualism, and a flattening of the law’s approach to remedies.

Keywords: Equity, fusion, systems theory, opportunism, uncertainty, formalism, contextualism, private law, remedies

JEL Classification: D82, K10, K11, K12, K40