Business law Essay Example | Topics and Well Written Essays - 3000 words - 1

Business law - Essay Example It is an established rule that helps the courts from extra labor. Every decision by courts becomes a precedent and if appeals are made in a higher court and the original decision is altered, the overriding decision becomes a precedent and the original decision is discarded as a precedent. It is at the very base of the common law system. There are two types of precedents Binding Precedent A precedent that is mandatory to follow is a binding precedent. The lower courts are bound to follow and honor the decisions made by higher courts for a given set of circumstances. For example, Dickinson v. Dodds is a very famous case that acts as a precedent regarding those cases which raise the question of valid acceptance and proper revocation of offer. Judges are bound to treat binding precedents as rules and principles. It is to be taken into account that in what hierarchical capacity, the court is performing. A precedent of a lower court may be used for help but it is not binding on the court. Another important factor is that of whether the case in question falls within the scope of the precedent. Persuasive Precedent A precedent that covers the case in question in its scope but is not binding on the court is a persuasive precedent. ... In common law system, the precedents form a part of the law along with the statutes. This helps in ensuring uniformity and consistency of the law. When a decision is made according to stare decisis, the personal involvement of a particular judge is eliminated; law prevails. In some situations, if the circumstances of a particular case are novel and no precedent is fully applicable, then the court looks at statutes for guidance. If statutes also do not help, then the court makes a just and equitable decision based on critical assessment of the facts of the case. The principle of Stare Decisis governs the use of precedents and enables the courts to uphold general fairness (Tribe & Dorf, 1990). The words ‘Stare Decisis’ emanate from the Latin maxim: Stare decisis et non quieta movere: "to stand by decisions and not disturb the undisturbed." (Adeleye, Gabriel et al, 1999). A common man is not afraid to go to the courts because he knows that standards are maintained. They are able to make estimates of what they would gain and what they would lose as a result of a lawsuit. All like cases are treated in a same way (F. Schauer, 1987). However, the binding precedents have a drawback of being too rigid at times and there are always some areas of the law that are needed to be reformed. The legitimacy of a court following stare decisis can never be seen with skepticism. It has veritable social interests (L.J. Strang, 2006). A court is bound to provide with sufficient explanations if it does not follow a binding precedent in a particular case. Decisions hence made are impartial and free from bias. It is very unlikely that such a decision would be challenged as being unlawful. If the decisions of a