Which statement best defines a legal precedent?

• A. A rule created by a single case that binds future decisions
• B. A decision used as a basis for deciding later cases
• C. A statute enacted by the legislature
• D. A temporary injunction issued by a court

Answer: (B)

A legal precedent is a court decision that serves as a guide for deciding later cases with similar facts. Through the doctrine of stare decisis, higher court decisions bind lower courts within the same jurisdiction, creating a predictable body of law. The part of the decision that actually resolves the dispute—the ratio decidendi—becomes the binding rule for future rulings, while other remarks (obiter dicta) are not binding but may be persuasive. This is different from a statute, which is created by the legislature, or an injunction, which is a court order. So, the statement that best defines a legal precedent is that it’s a decision used as a basis for deciding later cases.