When determining experimentally relative permeability and capillary pressure as a function of saturation, a self-consistent system of macroscopic equations, that includes Leverett's equation for capillary pressure, is required. In this technical note, such a system of equations, together with the conditions under which the equations apply, is formulated. With the aid of this system of equations, it is shown that, at the inlet boundary of a vertically oriented porous medium, static conditions pertain, and that potentials, because of the definition of potential, are equal in magnitude to pressures. Consequently, Leverett's equation is valid at the inlet boundary of the porous medium, provided cocurrent flow, or gravity-driven, countercurrent flow is taking place, and provided the porous medium is homogeneous. Moreover, it is demonstrated that Leverett's equation is valid for flow along the length of a vertically oriented porous medium, provided cocurrent flow, or gravity-driven, countercurrent flow is taking place, and provided the porous medium is homogeneous and there are no hydrodynamic effects. However, Leverett's equation is invalid for horizontal, steady-state, forced, countercurrent flow. When such flow is taking place, it is the sum of the pressures, and not the difference in pressures, which is related to capillary pressure.