Ratio decidendi defines the binding legal principle of a judgment and must be ascertained from its reasoning.

The ratio decidendi is the binding legal principle derived from a judgment's reasoning, identified by analysing the major premise (pre-existing rule) and minor premise (material facts); findings of fact and isolated observations are not precedent, multiple operative reasons together form the ratio, and courts are not required to construe an unclear ratio or treat stray observations as binding.

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