A judicial statement can be
ratio decidendi only if it refers to the crucial facts and law of the case. Statements that are not crucial, or which refer to hypothetical facts or to unrelated law issues, are obiter dicta.
Obiter dicta (often simply
dicta, or
obiter) are remarks or observations made by a
judge that, although included in the body of the court's opinion, do not form a necessary part of the court's decision. In a court opinion,
obiter dicta include, but are not limited to, words "introduced by way of illustration, or analogy or argument".
[2] Unlike
ratio decidendi,
obiter dicta are not the subject of the judicial decision, even if they happen to be correct statements of law. The so-called
Wambaugh's Inversion Test provides that to determine whether a judicial statement is
ratio or
obiter, you should invert the argument, that is to say, ask whether the decision would have been different, had the statement been omitted. If so, the statement is crucial and is
ratio; whereas if it is not crucial, it is
obiter.
If a court rules that it lacks
jurisdiction to hear a case (or dismisses the case on a technicality), but still goes on to offer opinions on the merits of the case, such opinions may constitute
obiter dicta. Other instances of
obiter dicta may occur where a judge makes an aside to provide context for the opinion, or makes a thorough exploration of a relevant area of law. If a judge, by way of illumination, provides a hypothetical example, this would be obiter even if relevant because it would not be on the facts of the case, as in the
Carlill case (below).
In reaching decisions, courts sometimes quote passages of obiter dicta found in the texts of the opinions from prior cases, with or without acknowledging the quoted passage's status as obiter dicta. A quoted passage of obiter dicta may become part of the holding or ruling in a subsequent case, depending on what the latter court actually decided and how that court treated the principle embodied in the quoted passage.