Legal Definitions - secundum bonum et aequum

The Latin phrase secundum bonum et aequum translates to "according to what is good and equitable."

This principle refers to making decisions or resolving disputes based on fairness, justice, and good conscience, rather than strictly adhering to rigid legal rules or technicalities. It allows a decision-maker, such as a judge or arbitrator, to consider the broader context, the spirit of an agreement, and the moral implications to achieve an outcome that is just and reasonable, even if it means departing from a literal application of the law.

Here are some examples illustrating this concept:

• Neighborhood Property Dispute: Imagine two neighbors involved in a dispute over a shared driveway. One neighbor has historically used a small portion of the other's land for parking, a practice that has continued amicably for decades without a formal agreement. A new owner moves in and, upon discovering the encroachment through a strict property survey, demands the immediate cessation of parking and removal of a small shed that has also been there for years. If a mediator or a court were to resolve this dispute secundum bonum et aequum, they might consider the long-standing peaceful arrangement, the minimal actual harm caused, and the disproportionate disruption of a strict enforcement. Instead of ordering immediate removal, they might suggest a compromise, such as a formal easement or a small payment, to reflect the fairness and equity of the situation rather than just the letter of property law.

  This illustrates the term because the decision prioritizes a fair and reasonable outcome based on the history and practicalities of the situation, rather than a rigid application of property boundaries that might lead to an overly harsh or disruptive result.

• Commercial Contract Interpretation: A small software development company enters into a contract with a large corporation to deliver a custom application. The contract specifies a very tight deadline and includes a clause for significant penalties if the deadline is missed. Due to an unforeseen, industry-wide technical issue that affected multiple vendors, the software company delivers the application a few days late. The corporation, citing the strict terms, demands the full penalty. If an arbitrator were to interpret this situation secundum bonum et aequum, they might consider the extraordinary circumstances, the good faith efforts of the software company, and the actual impact of the minor delay on the corporation. They might decide to reduce or waive the penalty, finding that a strict application of the contract terms would be inequitable given the context.

  This example demonstrates the principle by showing how a decision-maker can look beyond the literal wording of a contract to ensure the outcome is just and fair, taking into account external factors and the spirit of the agreement.

• International Arbitration: In certain international commercial arbitrations, parties may agree that the arbitrators should decide the case "as amiable compositeurs" or "ex aequo et bono," which is very similar to secundum bonum et aequum. For instance, two companies from different countries have a dispute over a complex joint venture agreement where the applicable law is unclear or could lead to an impractical outcome. Instead of strictly applying the potentially conflicting national laws, the arbitration panel is instructed to resolve the dispute secundum bonum et aequum. This allows them to craft a solution that is fair and reasonable for both parties, considering their commercial relationship, the intent behind their agreement, and the practicalities of their business operations, even if it means creating a solution that doesn't perfectly align with any single national legal code.

  Here, the term is applied to allow arbitrators to devise a practical and fair resolution based on general principles of equity and good conscience, rather than being strictly bound by the technicalities of potentially conflicting legal systems.