Legal Opinion Precedent Difference Legal Information

Legal opinions and legal precedents are easily confused and sometimes erroneously used interchangeably by those who do not know any better. This article intends to assist in clarifying the position.

(a) Precedents are binding. Most jurisdictions have some form of another of “stare decisis”, which is the term used for the doctrine of “binding precedent”. Put another way, this means that the decision of a higher court is binding on a lower court. The decision of the higher court is therefore referred to as a precedent. It is called that because it sets a precedent for other cases to follow. While precedent is usually always followed, it does not mean that it will remain that way forever. Precedents set by one court may be eventually overruled or overturned by a higher court, or departed from by another court of the same level.

(b) Legal opinions are, on the other hand, not legally binding although they  may be of persuasive authority. A good example of a legal opinion is usually the “obiter dicta” in a judgment of a Court . “Obiter dicta” means “things said by the way”, which, in simple English, refers to the matters said in passing by a Judge in his judgment and are not necessary central to the decision itself. As such these comments are merely opinions and do not actually form binding precedent unless they are expressly quoted and followed by a Court and used as the grounds or ratio decidendi of their decision.

(c) A simple illustration to demonstrate the difference would be this. In a case involving a breach of contract, a Defendant may allege that the contract was void and unenforceable because it was entered into for an illegal purpose, let’s say to evade tax. The court finds that a contract to evade tax is void and unenforceable – this is precedent. If the Judge, in making his decision said, “let’s say that the contract was not to evade tax but rather to find a way to benefit from a tax exemption, maybe then the result would have been different” – this part of the judgment is merely an opinion and is not binding precedent. It cannot be used as binding authority to say that a contract to benefit from a tax exemption is definitely not void and unenforceable. It may be referred to to support an argument as such, but cannot be said to be an actual precedent.