When it comes to resolving legal disputes, there are two main types of remedies that a court can award: legal remedies and equitable remedies. While a legal remedy and an equitable remedy may sound similar, they are actually quite different and it’s important to understand the differences between them.
When preparing to file a lawsuit, one of the most important things to think about is “what am I asking the court to do?” In other words, what kind of relief are you asking for? Most people don’t know or don’t consider whether they are asking for a legal remedy or an equitable remedy. This blog post attempts to explain the difference between an equitable remedy and a legal remedy in layman’s terms.
Legal Remedy — also known as Remedy at Law
Legal remedy is another way to say money damages. A legal remedy is a remedy that is granted by a court of law. This type of remedy is typically awarded in the form of damages, which are a monetary award that is paid by to compensate for a loss or injury. Legal remedies are intended to make the injured party whole again and to restore them to the position they would have been in if the injury had not occurred.
Examples of legal remedies include:
- Compensatory/direct damages: Damages that equal to the loss suffered by the injured party due to defendant’s actions.
- Punitive damages: These damages are contemplated to punish the party at fault for their wrongful action.
- Consequential damages: Damages that flow from the defendant’s actions. For example, loss of profit from a breach of contract.
- Incidental damages: Damages are the expense that the injured party incurred due to direct or consequential damages.
An equitable remedy, on the other hand, is a remedy that is granted by a court of equity. Unlike legal remedies, which are typically awarded in the form of damages, equitable remedies are more flexible and are designed to provide a fair and just solution to a dispute. This might include remedies such as an injunction, which is a court order that requires a party to do or refrain from doing something, or specific performance, which is a court order requiring a party to fulfill their obligations under a contract. We discuss injunctions and emergency injunctive relief in our Shareholder Dispute video series and in a blog post about injunctive relief.
Generally, in Pennsylvania, a party can only seek equitable remedies when remedies at law are not adequate. This means that if a money award can make you “whole” then the court will award remedies in equity. See Casey v. Phila. Auto Sales Co., 236 A.2d 800 (Pa. 1968). However, if the remedies in law are not complete or adequate, then a party can seek equitable remedies along with any available legal remedies. See Herr Abstract Co. v. Vance, 425 A.2d 444 (Pa. Super. Ct. 1980); Hill v. Nationwide Ins. Co., 570 A.2d 574 (Pa. Super. Ct. 1990).
Examples of equitable remedies include:
- Specific performance – The court may order the party at fault to perform the promises made in a contract. (More on specific performance here).
- Injunction – The court may order a party to stop doing something that is prohibited by an agreement or law. For example, if there is a valid non-compete agreement, the court could order an employee to stop competing with its former employer. (More on non-compete enforcement here).
- Shareholder Removal – If a shareholder has acted unlawfully, a court could eject the shareholder from the company (More on shareholder oppression here)
- Rescission – The court may cancel a contract if one party is guilty of misrepresentation, fraud, duress, or similar bad faith conduct.
Additional differences between Legal Remedies and Equitable Remedies
One key difference between legal and equitable remedies is that legal remedies are generally available only after a court has found that a party has breached their legal rights, while equitable remedies are available when a party has suffered some sort of injustice or unfairness. This means that, in some cases, a party may be able to receive an equitable remedy even if they are not entitled to a legal remedy.
Another difference between the two is that legal remedies are typically awarded based on a set of established rules and principles, while equitable remedies are granted at the discretion of the court. This means that the outcome of a case involving an equitable remedy may be more difficult to predict, as the court has more flexibility in determining what type of remedy is appropriate.
In summary, the main difference between a legal remedy and an equitable remedy is that legal remedies are typically awarded in the form of damages, while equitable remedies are more flexible and are designed to provide a fair and just solution to a dispute. While both types of remedies can be important in resolving legal disputes, it’s important to understand the differences between them in order to choose the right remedy for your situation.
Contact Kaminsky Law
Kaminsky Law has a lot of experience with business disputes and business litigation where parties are usually seeking an equitable remedy, splitting up a company, forcing out a shareholder or something similar. We also handle personal injury and employment law where we are typically asking the court to award money damages for injury or for unpaid wages.
If you have questions about how these apply to your situation, don’t hesitate to contract Kaminsky Law for a free consultation at 215-876-0800 or fill out a contact form here!