equity

noun

eq·​ui·​ty ˈe-kwə-tē 

plural equities

1

a

: justice according to natural law or right

specifically : freedom from bias or favoritism

b

: something that is equitable

2

a

: the money value of a property or of an interest in a property in excess of claims or liens against it

b

: the common stock of a corporation

c

: a risk interest or ownership right in property

d

: a right, claim, or interest existing or valid in equity

3

a

: a system of law originating in the English chancery and comprising a settled and formal body of legal and procedural rules and doctrines that supplement, aid, or override common and statute law and are designed to protect rights and enforce duties fixed by substantive law

b

: trial or remedial justice under or by the rules and doctrines of equity

c

: a body of legal doctrines and rules developed to enlarge, supplement, or override a narrow rigid system of law

Did you know?

Equity usually appears in courts of law as a term related to justice or proportional fairness, or in financial offices to property or one's share of a company. The derivative root of the noun, which gained stability in the English language during the 1300s, is Latin aequus, meaning "even," "fair," or "equal"; however, to be fair, it was introduced to English by the French, whose adaptation of the Latin was equité. The French word has clear legal connotations; it means "justice" or "rightness," and those meanings, plus a splash of "fairness," carried over to the English word equity. Noah Webster, himself a lawyer, notes the legal term equity of redemption in his 1828 dictionary defining it as "the advantage, allowed to a mortgager, of a reasonable time to redeem lands mortgaged, when the estate is of greater value than the sum for which it was mortgaged." This use led to the modern financial meanings of equity: "the value of a piece of property after any debts that remain to be paid are subtracted" and "a share in a company or of a company's stock."

Synonyms

• detachment
• disinterest
• disinterestedness
• evenhandedness
• fair-mindedness
• fairness
• impartiality
• justice
• neutralism
• neutrality
• nonpartisanship
• objectiveness
• objectivity

Examples of equity in a Sentence

In making these decisions we should be governed by the principle of equity.

We've been slowly paying off our mortgage and building up equity in our house.

Recent Examples on the Web

Coca-Cola Offers Lower Financial Risk Looking at financial risk, Coca-Cola fares better than PepsiCo, with its 14% debt as a percentage of equity being lower than 19% for the latter. —Trefis Team, Forbes, 4 Sep. 2024

Private equity giant Blackstone plans to acquire Australian data center operator AirTrunk for $16.1 billion. —Katie Fehrenbacher, Axios, 4 Sep. 2024

It is owned by Lion Capital, the private equity firm that also owns the John Varvatos brand. —Jean E. Palmieri, WWD, 4 Sep. 2024

Still, the market quickly bounced back, with the equity benchmark ending August up 2.3%. —Yun Li, CNBC, 4 Sep. 2024

Word History

Etymology

Middle English equite, from Anglo-French equité, from Latin aequitat-, aequitas, from aequus equal, fair

First Known Use

14th century, in the meaning defined at sense 1a

Phrases Containing equity

• equity capital
• home equity loan
• negative equity
• sweat equity

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Kids Definition

equity

noun

eq·​ui·​ty ˈek-wət-ē 

plural equities

1

: fairness or justice in dealings between persons

2

: a system of law that is a more flexible addition to ordinary common and statute law and is designed to protect rights and achieve just settlements in cases where ordinary legal settlements may be too strict

3

: the value of an owner's interest in a property in excess of claims against it (as the amount of a mortgage)

Legal Definition

equity

noun

eq·​ui·​ty ˈe-kwə-tē 

plural equities

1

a

: justice according to fairness especially as distinguished from mechanical application of rules

prompted by considerations of equity

comity between nations, and equity require it to be paid for

—F. A. Magruder

b

: something that is equitable : an instance of equity

the inequities produced by the system are outnumbered by the equities

2

a

: a system of law originating in the English chancery and comprising a settled and formal body of substantive and procedural rules and doctrines that supplement, aid, or override common and statutory law

the judicial power shall extend to all cases, in law and equity, arising under this Constitution

—U.S. Constitution art. III

see also chancery compare common law, law

Note: The courts of equity arose in England from a need to provide relief for claims that did not conform to the writ system existing in the courts of law. Originally, the courts of equity exercised great discretion in fashioning remedies. Over time, they established precedents, rules, and doctrines of their own that were distinct from those used in the courts of law. Although for a time the courts of equity rivaled the law courts in power, the law courts maintained an advantage partly as a result of forcing the equity courts to hear only those cases for which there was no adequate remedy at law. The courts of law and equity were united in England in 1873. Courts of equity also developed in the United States, but in most states and in the federal system courts of law and courts of equity have been joined. The courts apply both legal and equitable principles and offer both legal and equitable relief, although generally equitable relief is still granted when there is no adequate remedy at law.

b

: the principles that developed in the courts of equity : justice in accordance with equity

equity treats a devisee who procures a will by fraud as a constructive trustee

—W. M. McGovern, Jr. et al.

also : justice in accordance with natural law

c

: a court of equity

sat alone for some time in equity

—O. W. Holmes, Jr.

3

: a body of doctrines and rules developed to enlarge, supplement, or override any narrow or rigid system of law

4

a

: a right, claim, or interest existing or valid in equity

b

: the money value of a property or of an interest in property in excess of any claims or liens (as mortgage indebtedness) against it

c

: a risk interest or ownership right in property

specifically : the ownership interests of shareholders in a company

d

: the common stock of a corporation compare asset, debt

Etymology

Latin aequitat-, aequitas fairness, justice, from aequus equal, fair