What is the significance of a legal precedent?

• A. A rule created by an appellate court that must be followed unless changed by a higher court.
• B. A law enacted by a legislative body.
• C. A temporary guideline issued by a judge.
• D. A procedural rule for administrative agencies.

Answer: (A)

Precedent means the rules established by earlier court decisions, which guide how the law is applied in future cases with similar facts. When appellate courts articulate a rule, that rule becomes binding for other courts in the same jurisdiction. Lower courts must follow it, unless a higher court overturns it. This is the idea behind stare decisis: consistency and predictability in how rights and obligations are interpreted over time.

Precedent is not the same as a statute enacted by a legislature, nor is it a temporary guideline or a procedural rule for administrative agencies. It remains a binding rule until a higher court changes it or lawmakers enact new legislation that alters the rule. So the statement captures the core significance of precedent: it provides stable, predictable rules that guide subsequent judicial decisions.