What Does “Equity” Mean?

In contrast to the concept of "equality," the concept of “equity” has been an integral feature of the U.S. legal system from its founding. American courts of equity are based on the centuries-old English Court of Chancery, which today is a division of the British High Court of Justice. The dictionary definition of “equity” encompasses the principles of fairness, impartiality, justice, proportionality, and egalitarianism. Most civil matters associated with corporations, family law, and bankruptcies in the United States are adjudicated in courts of equity, which are distinct from courts of law. In courts of equity, the judge is required to exercise significant discretion over each case because the amalgamation of legal contracts, financial and material assets, and a wide spectrum of human activities often collectively result in a highly complex situation that cannot be reduced and codified into concise laws.

See this answer in its broader, original context in How Should Economic Value be Distributed?