I distinguish between two ways of understanding the effect of a decision as a precedent in the common law, which I refer to as the individual rule approach and the holistic approach. I consider the different versions of the common law that they would be expected to give rise to, which approach is more closely reflected in the practices of the common law, and why the holistic approach is preferable as a method for finding and developing the law in adjudication. I explain why under the holistic approach the common law contains principles as well as rules, and I consider the two approaches in the light of the requirement of the rule of law, and I show how the holistic approach explains a version of the policy/principle distinction.