A unique case with hardly any past reference material may become a precedent when the judge makes a ruling on it. Also, the new ruling on a similar present case replaces any precedent that has been overruled in a current case. Under the rule of stare decisis, courts are obligated to uphold their previous rulings or the rulings made by higher courts within the same court system.

For example, the Kansas state appellate courts will follow their precedent, the Kansas Supreme Court precedent, and the U.S. Supreme Court precedent. Kansas is not obligated to follow precedents from the appellate courts of other states, say California. However, when faced with a unique case, Kansas may refer to the precedent of California or any other state that has an established ruling as a guide in setting its precedent.

In effect, all courts are bound to follow the rulings of the Supreme Court, as the highest court in the country. Therefore, decisions that the highest court makes become binding precedent or obligatory stare decisis for the lower courts in the system. When the Supreme Court overturns a precedent made by courts below it in the legal hierarchy, the new ruling will become stare decisis on similar court hearings. If a case ruled in a Kansas court, which has abided by a certain precedent for decades, is taken to the U.S. Supreme Court where the Kansas ruling gets overturned, then the Court's overrule replaces the former precedent, and Kansas courts would need to adapt to the new rule as precedent.

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