Meaning

Common law was very rigid and inflexible. It could not respond favourably to the demand of time. It regarded the form of a transaction to be more important than its substance. It looked to the very letter of the agreement and not the intention behind it. On the other hand, Equity looks to the spirit not to the letter, it looks to the intention of parties and not to the words.

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Application and cases

In case of sale of land, if a party fails to complete it within the fixed for it, he is at Common Law, in breach of the contract, but equity does not take this rigid attitude. It allows a reasonable time to the party to complete it.

The application can be seen in the following instances-

1. Relief against penalties and forfeitures
2. Relief in regard to precatory trust

• Relief in regard to mortgages, the doctrine of equity of redemption and the doctrine of clogs on redemptions

1. Attitude in regard to statute of
2. Relief against penalties and forfeitures– Common Law courts insisted on the literal form of the contract that if the contract is breached, certain amount must be given as compensation, though the actual loss is not that much. Equity interpret the purpose and intent of the contract itself. The principal object of the contract is to perform it and not the compensation. The compensation is a subsidiary matter.
3. Precatory trust– A trust is created with- (1) an intention on his part to create a trust thereby,

(2) the purpose of the trust, (3) the beneficiary, and (4) the trust property. Where an author uses words such as ‘I hope’, ‘I request’ or ‘I recommend’ the first condition is missing. In cases where subsequent ingredients are found, in early days, it was held by the equity courts that he had the intention. This view is in use now but not as liberally as before.

• Relief in regard to mortgages– The mortgagor has a right to obtain his property back by payment of the debt and that is his right of redemption. The mortgagor’s right of redemption is guarded by courts and this has been expressed in a well-known legal maxim, “Once a mortgage, always a mortgage, and nothing but a mortgage”.

1. Attitude in regard to statute of frauds-

Recognition

1. Sec 55 of the Contract Act- If time is the essence of the contract, and it is not performed within the stipulated time, the contract or part of it which is unperformed would be voidable. If time is not the essence, the contract will not be voidable but entitles the promisee to damages.
2. Section 74 of the Contract Act- only a reasonable compensation can be

• Sec 114-A of the Transfer of Property Act- Forfeiture clauses in a