Binding precedent is a legal rule or principle, articulated by an appellate court, that must be followed by lower courts within its jurisdiction. Essentially, once an appellate court reviews a case, it will deliver a written opinion. This written opinion will include, among other things, the court’s determination on some legal matter. This determination, known as a holding, is binding on all lower courts within the jurisdiction, meaning that lower courts must apply this decision when presented with similar facts. The Supreme Court, for example, is the highest court in the U.S. and so, its decisions are binding on all other courts in the U.S. Alternatively, the decisions of the highest court in New York are only binding on other New York courts, but not courts in other states.
[Last updated in May of 2020 by the Wex Definitions Team]