What does equity mean?
Equity refers to the quality of fairness and impartiality — treating people justly according to their circumstances and needs. It carries strong positive connotations in moral, legal, and social discourse, where it often implies more than mere equality: giving each person what they need to achieve a fair outcome. In law, equity names a historic body of principles developed to temper the rigidity of common law, surviving today in doctrines like injunctions and trusts. In finance, equity denotes the value of an owner's stake in an asset once debts are deducted, as in home equity or private equity. Derived from Latin through Old French, the word remains central to debates about justice and distribution.
nounThe quality of being fair and impartial; fairness according to natural law or justice. In law, a system of rules supplementing strict common law, and in finance, the value of ownership in an asset after subtracting liabilities.
- Fairness, impartiality, or justice in treatment.
- (Law) A body of legal principles developed to supplement or correct the rigidity of common law.
- (Finance) The value of an owner's interest in property after deducting debts; shares representing ownership in a company.
"The court sought to decide the case with equity rather than rigid adherence to precedent."
"She argued that equity demanded the resources be distributed according to need, not merely divided equally."
"After years of mortgage payments, they had built up substantial equity in their home."
Used mainly in finance for shares or ownership stakes; rare in the fairness sense.
"Her portfolio is heavily weighted toward emerging-market equities."
In medieval England, if common law was too harsh, petitioners could appeal directly to the king's conscience — which is how 'equity' became its own branch of law.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of equity
Equity derives from Latin aequitas ('evenness, fairness'), from aequus ('level, equal'). It entered English via Old French equité in the 14th century, first in moral contexts before acquiring its distinct legal sense in English chancery courts. It is cognate with words from the same Latin root, including equal, equality, adequate, and equator.
How equity is actually used
Formal register across most uses; dominant senses differ by domain — fairness in social/legal discourse, asset value in finance. The plural 'equities' is standard in financial contexts (shares), while the fairness sense is typically uncountable.
Easily confused with equity
Equity means fairness or impartiality, while inequity means injustice or unfairness — they are near-opposites despite similar spelling.