Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · Business, political and legal systems

In a common law jurisdiction, the Court of Appeal decides a case on the sale of goods. In its judgment the judges state the legal principle on which the decision rests, and also comment on what the result might have been if the buyer had been a consumer, which was not the situation before the court. In a later High Court case with similar facts, which part of the Court of Appeal judgment is binding on the High Court?

Only the ratio decidendi, the legal principle needed to reach the decision, binds the High Court. The remark about a consumer buyer was obiter dicta, an incidental comment on facts not before the court, so it carries persuasive weight only and is not binding.

  1. AThe legal principle on which the decision rests (ratio decidendi)Correct
  2. BThe comment about the consumer buyer (obiter dicta)
  3. CBoth the principle and the comment, because the Court of Appeal is the higher court

Explanation

Only the ratio decidendi, the legal reasoning necessary for the decision, binds lower courts. Obiter dicta, such as comments on hypothetical facts, are only persuasive. The third option is wrong because a higher court's status does not make its incidental remarks binding.

Did you get it right without looking?

One question tells you little. A timed set on Business, political and legal systems shows your real accuracy, how long you take and where you lose marks.

Practise Business, political and legal systemsFree diagnostic mock

More Business, political and legal systems questions