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Legal System | Judicial Precedent

Judgment: Ratio Decidendi

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  • legal principle on which the decision is based is the ratio decidendi (the reason for deciding)
  • ratio is a proposition of law which is binding
  • judgment may also contain statements obiter dicta (other things said)
  • obiter dicta is not essential to decision so not binding
  • Sir Rupert Cross: ratio is .. any rule of law expressly or impliedly treated by the judge as a necessary step in reaching his conclusion, having regard to the line of reasoning adopted by him... (Precedent in English Law)
  • Professor Michael Zander: ratio is .. a proposition of law which decides the case, in light or in the context of the material facts... (Law Making Process)

Determining Ratio

  • necessary to distinguish between ratio decidendi and obiter dicta to establish precedent


  • can be difficult to determine the ratio
  • Unmarked

  • ratio not clearly indicated in a judgment
  • Old Cases

  • old cases are weak authority as they do not state the reason for the decision
  • Non-essential

  • not all the reasons for a decision are essential
  • Ratios

  • case may have more than one ratio in a single judgement
  • there may be several points of law are at issue
  • multi judge courts, sometimes each judge will have reached conclusion differently
  • no single ratio of whole court despite a majority decision
  • if no discernible ratio the decision will not be binding on future courts
    Esso v Commissioners for Customs & Excise [1976]
    • D, Esso, advertised 'free' promotional World Cup coin per four gallons of petrol bought
    • C argued D liable to pay purchase tax
    • issue whether the coins were sold - was there a contract under the Sale of Goods Act?
    • House of Lords, majority decision 4:1
    • Lord Fraser, dissenting, argued motorist had a straightforward contract for the coins as part of the undisputed contract for the purchase of petrol
    • Viscount Dilhorne and Lord Russell, and three Court of Appeal judges, argued that there was no contract for the coins as they were a gift
    • Lord Wilberforce and Lord Simon argued that there were two contracts, one for the petrol and a 'collateral contract' for the coins
    • on Lord Fraser's interpretation, there was a contract, C won
    • other interpretations, that the coins were a gift or part of a 'collateral contract', not a sale, C lost
    • C lost
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