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This is going to contain errors, one would have to be a professional to get this right, but the gist is that formally, no, but in practice it kind of does.

If the decision was made by one of the higher courts, a precedent will be created, which while not formally binding is essentially treated as such. In general the precedents can't create new law, only interpret. However this turns out to sometimes be a difference without significance, as effectively new law is created due to how heavy lower courts are leaning on some such cases.

One I have some knowledge of regards agency of company representatives where the interpretation made it essentially legal for a company to use third party sellers to act as representatives for the company write and sign contracts, which then the original party could renege on at any time, with no penalties by simply stating that their agent had overstepped their bounds. This was a case of a house builder backing out because the agent had given a price that the house builder deemed a little too low. This is described in the relevant literature as a clear precedent for all manners of company agency, while if you read the actual judgement it was clearly marginal. But it has effectively created new law. You now have to make sure to write contracts with an employee of whomever you are dealing with if you are to be able to trust in your contract.

All courts also have a right to judicial review, thus in theory a single local court can nullify any law if it doesn't follow the constituting laws, either completely, or for a specific case. If this happens, then that case becomes a precedent. This is however somewhat rare as far as I understand it, as it's somewhat of a joke that the best way to loose a case is to refer to the constituting laws, as they are essentially completely ignored.

Yeah, I'm amazed it works at all.

At least on the surface it seems our judicial system really has some deep flaws that nobody has really dared to address.

To little real oversight, no binding checks on the constitutionality of new laws - although the advisory committee tends to be respected, and no formal way afaik to revoke precedents that turn out to have bad consequences.

It seems to work a lot based on some form of "gentlemen's agreement", and tradition. By now I guess we all know how quickly those can crumble.




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