When discussing the rules relating to consensual economic relationships between persons, legal rules and equitable rules sometimes become intermixed. As in other fields of law in the United States, "law" and "equity" are not two aspects of contract law. Contract law is "law" (common law). In limited instances involving or relating to contract-type situations, "equity" or "equitable remedies" may be available.

Law determines if a contract exists and, if so, the meaning of its terms, if it has been performed or breached, etc. As has always been the case, equity becomes involved ONLY if the contract-law remedy is inadequate. To obtain an equitable remedy, the requesting party must prove the legal remedy is inadequate. Effectively, the sole contract-law remedy is a judgment for money. That remedy may be inadequate in two situations:

1. When money is not a reasonably acceptable substitute for performance of a contract.

2. When the petitioning party has no contract-law remedy because (a) no contract exists, or (b) the petitioning party has breached the related contract.

In the first situation, equity will provide a remedy other than a money judgment, usually an order for specific performance, if that is possible under the circumstances. Since there is an assumption that a contract involves commercial purposes, money is usually an adequate remedy. If the performance to be rendered is somehow "unique," money may not be a reasonable substitute for performance. If the contract was for the purchase of 1999 Ford pickup, the non-breaching party can take the money from the judgment and buy a different, but essentially identical 1999 Ford pickup. If, however, the contract was for the purchase of 1927 Rolls Royce, there may not be any others reasonably available at any price. In that situation, the equitable remedy is specific performance; the contract must be performed.

In the second situation, equity will normally provide a money judgment. The amount of a money judgment entered in an equity case is usually different from what would have been entered in a law case. The objectives of the two are different. Equity purports to do what is "fair" under the circumstances, which frequently gives the injured party enough money so that she or he does not lose anything, i.e. "comes out even". Contract law, on the other hand, attempts to put the parties in the same position as they would have been if the contract had been performed. That means a law judgment will include any profit the injured party would have realized, while an equity judgment frequently will not.

When the words "equitable", "quasi-", "substantial", "fair" are used in a court decision, the court is probably applying equity rules, even though it may not so state. When the court is considering a remedy other than money, it is applying equity rules. But beware, "reasonable" is a law-word because it refers to a rational conclusion based on facts.