What does 'precedent' refer to in a legal context?

In a legal context, 'precedent' refers to a judicial decision that serves as authority for future cases. This principle is essential to the doctrine of stare decisis, which means that courts should follow the precedents set by previous rulings when making decisions in similar cases. By adhering to established precedents, the legal system maintains consistency and predictability, allowing individuals and entities to have a clearer understanding of how the law is applied in practice.

For example, if a higher court has ruled on a particular legal issue, lower courts will look to that decision when faced with similar circumstances to ensure uniformity in legal interpretations and outcomes. This reliance on past decisions helps to streamline the judicial process and supports the rule of law by reinforcing established legal standards.