Precedence in Business Law Analysis

Precedent is a key feature of lawful experience, which requires courts to follow conclusions attained in previous cases, thereby altering the decisions in personal cases into a foundation of law. This article scrutinizes two major issues connected with precedent:

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  • How to distinguish the way that precedent acts as a source of law;
  • How to rationalize the prerequisite that courts follow previous conclusions not considering the merits of those conclusions.

Precedents are often regarded to create common legal rules, but it is notorious whether this is the best way to understand their role in legal reasoning. Equally, it is unclear that the most common justifications for precedent unequivocally vindicate the practice.


The good and the bad aspects of deciding current cases using precedents may be regarded as one’s subjective opinion, as any specialist has one’s own vision of the problem. It is necessary to mention, that creating a precedent, judge fills the gap in the lawmaking. On the one hand it has positive angle, as the gaps become less numerous. On the other hand, the creation of precedents make the legislation less flexible, and sometimes leads to rather curious cases. Thus, the principle of precedence led to the appearing of such laws, as:

  • In Baltimore it is forbidden to come to theater with lions
  • In New Orleans it is forbidden to tie alligators to fireplug
  • In North Dakota it is considered crime to go to bed in shoes
  • In Chico city (California), anyone, who explodes the nuclear bomb within the city will be 500 dollars fined.

And these are not the only examples. There are hundreds of examples in the legislation of the USA.

Precedent that was not followed, or should not be followed in the future

First of all it is necessary to mention, that Precedent that must be applied or followed is known as binding precedent. 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. But the fact is that, if the precedent is not followed, courts make everything possible to conceal this fact, and eliminate the precedent, especially if it is curious as one of the previously described. The precedents are claimed to be followed, and any deviation is regarded as a crime.

Leeway that judges have

It is necessary to mention, that any use that seems fair is fair use. In the law, the term “fair use” has a specific meaning that only partly overlaps the plain-English meaning of the words. While judges have much leeway in deciding how to apply fair use guidelines, not every use that is commonly considered “fair” counts as fair use under the law. the Court gave the government the possibility, in the forthcoming new decree, to provide for an overtime quota for intermediate managerial and professional staff different from the one in use for other employees as, “relative to managerial staff incorporated into a standard work schedule”, intermediate managers “have a degree of leeway in determining their own schedules”. The government can thus set a quota above 130 hours.


Henry R. Cheeseman, Business Law 6th edition. Prentice Hall, 2007

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