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

In a common law jurisdiction, the Court of Appeal decides a contract dispute and states a rule of law as the basis of its decision. A later case with materially similar facts comes before a High Court judge, who is bound by Court of Appeal decisions. Which part of the earlier judgment must the High Court judge follow?

The High Court judge must follow the ratio decidendi of the Court of Appeal decision. This is the legal reasoning necessary to reach the decision, and it binds lower courts in materially similar cases. Obiter dicta are only persuasive, and the bare facts are not a binding rule.

  1. AThe ratio decidendiCorrect
  2. BAny obiter dicta
  3. CThe facts of the case only

Explanation

Only the ratio decidendi, the legal principle necessary to the decision, is binding on lower courts in similar cases. Obiter dicta are incidental remarks and are merely persuasive. The facts alone do not create a binding rule; it is the principle applied to them.

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