The substance of precedent is known as "common law" and it bonds future determinations. When parties are in disagreement in the future and if the nature of the conflict is similar then the common law court bases its decision with the help of Presidential decisions of applicable courts2.
The court is bound to follow the reasoning of a past similar disagreement in which the issue was resolved. This principle is called ‘stare decisis’. But if the present disagreement is different from all other previous cases then the judges have the right and responsibility to formulate new law which thus creates a precedent as in Marbury v. Madison, 5 U.S. 137 (1803). "It is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases, must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each". From then on, the new verdict became precedent and is binding on future courts.
The English legal system is based on the common law and the precedents. The doctrine of precedent is defined as ‘The common law principle which binds a judge or a magistrate to follow a previous similar decision of higher courts in the same hierarchy. also known as stare decisis’ (Vickery &. Pendleton 2006), which implies the decision stands.
The doctrine of precedent derives from common law and law of equity, which is ‘English-made’ laws that aim to be fair and treat all equally so that the decisions by the courts are predictable and consistent in resolving disputes. There are binding and persuasive precedents, of which binding precedents are known as ‘ratio decidendi’ when the final order or ‘res judicata’ by the .court is made to the immediate parties, and it has a legal effect based on the key reasons for the decision. This includes passed decisions by the higher courts in the same hierarchy in similar cases, will be used for future similar cases so there are consistent remedies or sanctions under common law. .