Common law is system of case law developed by judges, courts, and similar tribunals. The significance of common law is that a court not only reaches a decision that affects the litigant(s), but also that the court gives reasons for its decision and those reasons (or "rationes decidendi") agglomerate with earlier decisions to form a body of legal principles that are binding on everybody else (and in addition have precedential effect on future cases).
The classic exemplar is England, where the common law originated during the Middle Ages. The name "common law" refers to the law being common throughout the Kingdom of England (rather than merely found in the component realms of Mercia, Wessex, and Danelaw). English common law is deemed to have existed from "time immemorial" (1189). As the British Empire spread to North America and beyond, the common law became established in the colonies. Today, one third of the world's population live in common law jurisdictions or in systems combined with civil law. Although the common law in England established the principles of almost all branches of the law (such as Crime, Contract, Tort, Constitutional, etc), the courts abide by Montesquieu's theory of the separation of powers and thereby acknowledge that only Parliament may legislate. To justify their undeniable legislative creativity, the courts adopt the "legal fiction" that "they do not make the law, but only declare it".
A common law system will typically have a number of sources of law, usually in a hierarchy. The top source of law is the written constitution The next source is statutory law (Acts of Parliament), which require a simple legislative majority to be enacted or repealed. Then there is subordinate legislation, such as regulations (US), which are promulgated by the executive branch, or statutory instruments (UK), which must still be laid before Parliament. Then follows delegated legislation, namely the law of devolved bodies (in the UK, such as the Scottish Parliament, the Welsh Assembly) whose statutes are secondary to the central legislature. County councils and local councils may pass "bye-laws". Only then do we meet the common law (with, in the UK, its chancery equivalent of Equity). Lesser sources include Parliamentary Conventions, Custom, and respected books of authority such as Coke, Blackstone and Bagehot.
In cases where the parties disagree on what the law is, a common law court looks to past precedential decisions of relevant courts. If a similar dispute has been resolved in the past, the court is usually bound to follow the reasoning used in the prior decision (a principle known as stare decisis). If, however, the court finds that the current dispute is fundamentally distinct from all previous cases (called a "matter of first impression"), and legislative statutes are either silent or ambiguous on the question, judges have the authority and duty to resolve the issue (one party or the other has to win, and on disagreements of law, judges make that decision). Resolution of the issue in one case becomes precedent that binds future courts. Stare decisis, the principle that cases should be decided according to consistent principled rules so that similar facts will yield similar results, lies at the heart of all common law systems....LESS