Editing Maxims of equity (section)

===Equity looks on as done that which ought to have been done===
Sometimes phrased as "equity regards as done what should have been done", this maxim means that when individuals are required, by their agreements or by law, to perform some act of legal significance, equity will regard that act as having been done as it ought to have been done, even before it has actually happened. This makes possible the legal phenomenon of [[equitable conversion]].

The consequences of this maxim, and of equitable conversion, are significant in their bearing on the [[risk of loss]] in transactions. When parties enter a contract for a sale of [[Realty|real property]], the buyer is deemed to have obtained an equitable right that becomes a legal right only after the deal is completed. (For an English example, see ''[[Walsh v Lonsdale]]''.)

Due to his [[equitable interest]] in the outcome of the transaction, the buyer who suffers a breach may be entitled to the [[equitable remedy]] of [[specific performance]] (although not always, see below). If he is successful in seeking a remedy at law, he is entitled to the value of the property at the time of breach regardless of whether it has appreciated or depreciated.

The fact that the buyer may be forced to suffer a depreciation in the value of the property means that he bears the risk of loss if, for example, the improvements on the property he bought burn down while he is still in [[escrow]].

Problems may sometimes arise because, through some lapse or omission, insurance coverage is not in force at the time a claim is made. If the policyholder has clearly been at fault in this connection, because, for example, he has not paid premiums when he should have, then it will normally be quite reasonable for an insurer to decline to meet the claim. However, it gets more difficult if the policyholder is no more at fault than the insurer. The fair solution in the circumstances may be arrived at by applying the principle that equity regards that as done that ought to be done. In other words, what would the position have been if what should have been done had been done?

Thus, we know in one case, premiums on a [[life insurance]] policy were overdue. The insurer's letter to the policyholder warning him of this fact was never received by the policyholder, who died shortly after the policy consequently lapsed. It was clear that if the notice had been received by the policyholder, he or his wife would have taken steps to ensure the policy continued in force, because the policyholder was terminally ill at the time and the coverage provided by the policy was something his wife was plainly going to require in the foreseeable future. Since the policyholder would have been fully entitled to pay the outstanding premium at that stage, regardless of his physical condition, the insurer (with some persuasion from the Bureau) agreed that the matter should be dealt with as if the policyholder had done so. In other words, his widow was entitled to the sum assured less the outstanding premium. In other similar cases, however, it has not been possible to follow the same principle because there has not been sufficiently clear evidence that the policy would have been renewed.

Another illustration of the application of this equitable principle was in connection with [[motor vehicle insurance]]. A policyholder was provided with coverage on the basis that she was entitled to a "no claims" discount from her previous insurer. Confirmation to this effect from the previous insurer was required. When that was not forthcoming, her coverage was cancelled by the brokers who had issued the initial coverage note. This was done without reference to the insurer concerned whose normal practice in such circumstances would have been to maintain coverage and to require payment of the full premium until proof of the no claims discount was forthcoming. Such proof was eventually obtained by the policyholder, but only after she had been involved in an accident after the cancellation by the brokers of the policy. Here again, the fair outcome was to look at what would have happened if the insurer's normal practice had been followed. In such circumstances, the policyholder would plainly have still had a policy at the time of the accident. The insurer itself had not acted incorrectly at any stage. However, in the circumstances, it was equitable for it to meet the claim.