Ratio decidendi is a Latin phrase meaning “the reason” or the “rationale for the decision”. The term ‘ratio” means the ‘the measure of the quantity in other’ and ‘decidendi’ means decision. It is the point in a case which determines the judgement and explains the principals established in d case. According to Salmond “A precedent is a judicial decision which contains in itself a principal”. The underlying principal which thus forms is an authoritative element and is termed as ratio decidendi. It is a legal rule which is derived from the parts of legal reasoning within a judgement. It refers to legal, moral, political, and social principals used by a court in a particular judgement. This is a general rule and is binding on all the courts. The process of determining the ratio decidendi is the analysis of what the courts decide based on the facts of every case. It is one of the most essential tools used by the lawyers. The ratio decidendi of a case can be defined as the material facts of the case plus the decision thereon.
Various professors have put forward their views on how the ratio decidendi of a particular case could be decided. Professor Wambaugh suggests that the ratio decidendi can be discovered by reversing the proposition of law put forward by the court and inquiring whether the decision would be same notwithstanding the reversal. If it is the same, then the proposition of law is no part of the ratio. This test is known as the “Wambaugh Test”. The view of Professor Goodheart is that ratio decidendi is nothing more than the decision based on the material facts of the case. The view of Goodheart is that facts such as time, place etc are presumed to be immaterial unless expressly stated to be material. So there should always be a distinction between material and immaterial facts of the case. His theory mainly focussed on 2 main points. The first point is that it is within the function of the judges in the subsequent cases to say what they choose to regard as the material facts of the earlier case. The second point is that two persons may agree to a collection of individual facts and yet from different impressions of the group of them as a unit.
The search for the ratio of a case is a process of elucidation, i.e. the abstract principals of law that led to the decision. For example, the ratio in Donogue v. Stevenson would be that a person owes a duty of care who he can reasonably foresee will be affected by his actions. It is in this statement of the material facts and the conclusion based that the ratio of the case can be found. A case in law is a collection of facts. Whether two cases resemble each other sufficiently so that one can be regarded as a precedent for the other rests entirely on the impression which a particular judge forms of the facts of each case as a whole. The result is that the ratio decidendi of a case depends a good deal on what later tribunals have declared to be the ratio decidendi.