Legal Definitions - equitable defense

An equitable defense is a type of legal argument made by a defendant in a lawsuit that appeals to the court's sense of fairness and justice, rather than relying strictly on legal technicalities or statutes. These defenses are used to prevent a plaintiff from winning a case, even if they might have a technically valid legal claim, because allowing them to win would be unjust or unfair given the specific circumstances or the plaintiff's own conduct. Equitable defenses are rooted in principles of equity, which aim to provide remedies where a strict application of the law would lead to an unconscionable or unfair result.

Here are some examples illustrating how an equitable defense might apply:

• Example 1: Unclean Hands

  Imagine a situation where a company (Company A) sues a former employee for allegedly stealing its proprietary customer list. However, during the legal proceedings, it is revealed that Company A itself had previously obtained a significant portion of that very customer list by illegally hacking into a competitor's database years ago. The former employee could raise an equitable defense of "unclean hands."

  This defense argues that Company A, the plaintiff, should not be allowed to seek relief from the court for stolen information when it has engaged in similar or related unethical and illegal conduct itself. The court, acting on principles of fairness, might refuse to grant Company A the relief it seeks because its own conduct is tainted by wrongdoing related to the subject matter of the lawsuit.

• Example 2: Laches (Unreasonable Delay)

  Consider a scenario where a property owner discovers that their neighbor's fence, built 25 years ago, encroaches slightly onto their land. The original property owner knew about the encroachment when the fence was built but never raised an objection. Now, the current owner, having recently purchased the property, decides to sue the neighbor to have the fence moved, despite the fence having been in place for decades without complaint and having been maintained by successive owners.

  The neighbor could raise the equitable defense of laches. This defense argues that the plaintiff (or their predecessor) waited an unreasonably long time to assert their right, and this delay has prejudiced the defendant. In this case, the long delay has made it difficult to ascertain the original circumstances or intent, and the fence has become a long-standing fixture. It would be unfair to force its removal now due to the plaintiff's predecessor's inaction over decades, especially since the current neighbor relied on the existing boundary.

• Example 3: Promissory Estoppel

  A small business owner is negotiating a lease for a new retail space. The landlord orally assures the business owner that the lease agreement is finalized and encourages them to begin purchasing expensive custom fixtures and hiring new staff specifically for that location. Relying on these assurances, the business owner invests a substantial amount of money. A few weeks later, before a formal written lease is signed, the landlord backs out and leases the space to another party.

  The business owner could raise an equitable defense (or claim, depending on the jurisdiction) based on promissory estoppel. While there might not have been a formal, written contract, the landlord made a clear promise that the business owner reasonably relied upon to their significant financial detriment. An equitable defense would argue that it would be unjust to allow the landlord to go back on their word without consequence, even if a formal contract wasn't signed, because the business owner acted in good faith based on the landlord's assurances. The court might prevent the landlord from denying the existence of a commitment or award damages to compensate the business owner for their reliance.