In legal terms, what does the term "precedent" refer to?

The term "precedent" refers to a legal principle or rule that is established in a previous case and is used as a standard in subsequent cases. This concept is rooted in the legal doctrine of stare decisis, which means "to stand by things decided." When a court relies on precedent, it looks to earlier judicial decisions to guide its judgment in current cases with similar circumstances. This helps ensure consistency and predictability in the law, as similar cases are likely to yield similar outcomes.

The option indicating a future legal guideline based on past rulings effectively captures this essence of how precedents function in legal systems. Legal precedents form the basis upon which courts interpret and apply the law in similar future cases, thus influencing judicial decision-making.