What does the term 'precedent' refer to in legal studies?

The term 'precedent' in legal studies specifically refers to a judicial decision that serves as an example or rule for future cases. This concept is rooted in the principle of stare decisis, which means "to stand by things decided." Courts rely on precedents to ensure consistency and predictability in legal decision-making. When a higher court sets forth a ruling, lower courts are generally obliged to follow that ruling in similar cases, unless there is a significant reason to deviate from it.

In this context, understanding precedent is crucial for the application of law, as it guides judges in interpreting legislation and in determining the outcomes of cases that may present similar facts or legal issues. This concept helps create a cohesive body of case law that contributes to the stability and fairness of the legal system.