Precedent is a feature of the Common Law tradition of law. Precedent refers to the legal principle announced by a higher court that must be followed in later cases. A recent decision in the same jurisdiction will be given great weight. Decisions of lower courts are not binding on higher courts, although from time to time a higher court will adopt the reasoning and conclusion of a lower court.
Precedents are made by judges deciding cases. They arise from the legal principles created by a court decision and must be followed or used by subsequent courts in deciding cases that present the same issues. In general, decisions of higher courts within a system are mandatory precedent on lower courts within that same system. The principle announced in the decision must be followed in later cases. Another name for precedent is case law.
Cases need not be identical or similar to control. The principle announced in a case transcends the particular facts in that case and will be applied to different fact situations. However, a decision may be grounded in the specific facts and will not be applied generally. The court that created the precedent can always overrule it.
Knowing the difference is what law school is all about. The process of judicial decision making, the use and role of precedents, constitutional and statutory interpretations, is what a legal education teaches.
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