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possibilities –
the court makes a new rule but it does not fit the facts of the
case or the court declines to make a new rule.
These three outcomes, two positive and one negative, can be summarised as
follows:
Possibility 1 New Rule Fitting the Facts. The court makes a new rule
that fits the facts of the case. This rule fits the facts perfectly because each
element of the rule is a generalisation of one of the facts. Because the court has
made this new rule and it fits the facts, it decides the case one way or the
other. This becomes a strong precedent because it decides the case in a way
that would not have happened if the court did not make the new common law
rule. This is a positive precedent. 
Possibility 2 New Rule Not Fitting the Facts. The court makes a new
rule, but this new rule does not fit the facts of the case. This is the
case
because not all of the elements consist of a generalisation of the facts of the
case. Realistically, Possibility 2 happens when only one or two of elements of
the new rule are not generalisations of fact of the case. In other words the
court agrees with the broad proposition that there needs to be a new rule in the
area, but this new rule is not capable of applying to the facts of the case in
hand. This rule becomes a precedent that is not as strong as Possibility 1, but
still has some force. This is a positive precedent.
Possibility 3 No New Rule. The court does not make any new rule at all.
This decision is a precedent to the effect that the common law does not
contemplate or embrace a new rule in any of the forms that are proposed. This
is a negative precedent. Negative precedents, where no rule is made, tend to be
weaker than positive precedents.
In these three cases the ratio decidendi is as follows:
(1)
Possibility 1. The ratio decidendi consists of the new rule, both
elements and consequences, formulated by the court.
(2)
Possibility 2. The ratio decidendi consists of the new rule, both
elements and consequences, formulated by the court.
(3)
Possibility 3. The ratio decidendi consists of the statement by the court
that there is not sufficient justification for the new rule that was proposed to
the court.
Interpreting Law
If a court is interpreting statute law or common law, the process of creating the
new rule that becomes the ratio decidendi is simple. The court has before it all
of the meanings of the ambiguous provision. At the end of the reasoning
process it chooses one of these meanings as the legally correct meaning of the
provision, or chooses two or more as the correct legal meanings. So if an
ambiguous provision, Provision X in Rule Y, has four meanings, Meanings 1-4
the court may decide that Meaning 2 is legally correct. If it does so, the ratio
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