The distinction you have drawn resembles the traditional distinction between (common) law and equity. In the seventeenth century, English courts of law exercised an ancient jurisdiction that was inflexible and formalistic, while courts of equity exercised a more wide-ranging ecclesiastical jurisdiction according to the Lord Chancellor's conscience. Law and equity were 'fused' to some extent by the Judicature Acts from 1873 onwards, but the distinction still has practical significance.
In many cases, equity provides a remedy where the strict application of the common law could result in unconscionable outcomes. For example, it is equity which requires a trustee to manage trust property in the interest of beneficiaries, even though the trustee is the legal owner of the property. Equity may also require people to return money they have received by accident or where it would be unconscionable for them to retain it, even though there is no relationship between the parties under the common law of tort or contract.
The concept of unconscionability is closely linked to the idea of exercising powers 'faithfully.' Equity is the source of fiduciary duties, which are essentially legally-enforceable duties to be faithful to a principal. Both words are derived from the Latin root fidere, "to trust."