In common law legal systems, a precedent or authority is a principle or rule established in a legal case that a court or other judicial body may apply when deciding subsequent cases with similar issues or facts. Black's Law Dictionary defines "precedent" as a "rule of law established for the first time by a court for a particular type of case and thereafter referred to in deciding similar cases."

In other words, precedent can be defined as "an already decided decision which furnishes the basis for later cases involving similar facts and issues."

Precedent that must be applied or followed is known as binding precedent (alternately metaphorically precedent, mandatory or binding authority, etc.). Under the doctrine of stare decisis, a lower court must honor findings of law made by a higher court that is within the appeals path of cases the court hears. In state and federal courts in the United States of America, jurisdiction is often divided geographically among local trial courts, several of which fall under the territory of a regional appeals court. All appellate courts fall under a highest court (sometimes but not always called a "supreme court"). By definition, decisions of lower courts are not binding on courts higher in the system, nor are appeals court decisions binding on local courts that fall under a different appeals court. Further, courts must follow their own proclamations of law made earlier on other cases, and honor rulings made by other courts in disputes among the parties before them pertaining to the same pattern of facts or events, unless they have a strong reason to change these rulings (see Law of the case re: a court's previous holding being binding precedent for that court).