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The chancery court is a court of equity that originated in England and Wales. It was given jurisdiction over matters involving land disputes, trusts and the affairs of mentally incompetent people and minors. The chancery court was able to overrule decisions made by common law courts, and it was also able to hand down injunctions and orders for specific performance.
In the United States and Canada, courts deal with matters of law, as well as those of equity. In England the chancery court is part of the High Court of Justice. It deals with estate matters, trusts and business law. Legal disputes involving intellectual property and tax appeals are also heard at this level.
A matter of law that would go before the court is one where the wronged party is seeking monetary damages. An example of this type of case is where someone has been injured in an accident or in a case of medical malpractice and is looking for compensation for medical expenses or lost wages. The chancery court hears matters where no remedy at law is available.
When the wronged party is seeking a different remedy than monetary damages, the chancery court can order that a party be barred from doing or continuing to do certain actions. When an injunction is handed down, the object is required to comply with its terms. In some cases, the injunction is requested as a temporary measure until the court can make a final ruling. Failing to comply with the terms of the injunction may result in the party responsible for breaching the court order being required to pay damages or in criminal prosecution, depending on the jurisdiction involved.
Specific performance is another remedy that falls within the powers of the chancery court to grant to a wronged party in a legal action. When the court orders this remedy, it means that the terms of the contract originally entered into by the parties must be fulfilled. An example of when a court may make an order for specific performance is when a contract has been signed to buy a house or other real property. The vendor is legally obligated to complete the sale as agreed, since the purchaser can argue that the property involved is unique.
A court of equity determines what is fair in each case brought before it. These types of matters may include those concerning how the constitution is interpreted and applied, as well as various contract disputes. It also offers recourse for those who wish to appeal a ruling made by a tribunal or administrative body.
There are still some states in the United States that have separate courts of law and equity -- Delaware, Mississippi, Tennessee and Alabama, if memory serves. Arkansas also had chancery courts until about a decade ago, but everything has been unified into the circuit courts system across the state.
It might seem like the division led to confusion, but it made a lot of sense. The only problem is if a case seeks both legal and equitable remedies, but those states that still have chancery courts have found ways to approach that problem.
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