The doctrine of precedent presupposes the existence of the hierarchy of courts. The general rule is that a court is bound by the decision of all the higher courts to itself. The question now arises as to which part of a decision binds the lower courts. It becomes necessary to consider what really constitutes a decision in a given case and what is really binding on lower courts.
A decision generally has two aspects: –
- What principles it lays down on the rule of law for which it becomes an authority. This is generally referred to as the ratio decidendi of the case.
- What the case decides between the parties. Such matters become res judicata between the parties to the case and cannot be the subject of further disputes and were provided for in Section 11 of the Code of Civil Procedure, 1908.
We can say that the term ratio decidendi means the reason for the decision. In other words, the ratio decidendi is the rule of law on which the decision on a case or decision is based. It forms the general principle which can be deduced in a given case.
As per Professor Dwarkin, the docrine of precedent givees a judicial decision two types of force: enactment force which is its effect on future case and gravitational force which justifies treating like case alike.The enactment force comes from ratio decidendi and gravitational force leads to follow a precedent. According to Rupert & Cross, the ratio decidendi is a rule of law treated expressly or by impliedly by the judge as a necessary step to reach its conclusion. According to Salmond, ratio decidendi roughly refers to the law applied and acted upon by the Court. In other words, the rule which the Court considers to govern the case.
The illustration for ratio decidendi may be cited as the English case of Bridges vs. Hawkesworth, 1851. In this case, a customer found some money on the floor of a shop. The Court applied the rule of finder keepers and awarded the possession of the money to the customer rather than to the shopkeeper. The ratio decidendi of this case that finder of goods is the keeper i.e. has right of possession over it. But in South Staffordshire Water Company vs. Sharman, where the defendant found two gold rings in a mud of pool owned and occupied by the plaintiffs, the Court refused to apply the finder keepers rule expressed in Bridge’s case on the ground that in that case, money was found in a public place i.e on the shop floor but in the instant case, it was found in a pool which was not open to public.
The ratio decidendi of Donoghue vs. Stevenson, 1932 was that it exploded the doctrine of privity of contract and held that manufacturer is liable to consumer for his negligence in manufacture of the goods which is of such a nature that it is incapable of intermediate inspection by the retailer. The plaintiff was therefore entitled to the damage caused to her due to the decomposition of the snail in the ginger beer which was sold in opaque bottles.
Keeton believes that the ratio decidendi is a principle of law which forms the basis of the decision in a particular case. According to Professor HLA Hart, the analysis of the ratio decidendi is at the heart of a decision that governs the final conclusions of a given case.