The doctrine of precedent is one of the most distinctive features of the modern common law. Understanding the operation of precedent is important for our theorizing about the nature of law, since any adequate theory must be compatible with the practice. In this paper I will explore the conventional view of precedent endorsed by practitioners and many legal philosophers alike. I will argue that for all its attractions, it provides a distorted view of the nature of precedent. The distortion grows out of the basic assumption that precedents create rules, and thus that the common law can be understood as a form of rule-based decision-making. Instead, the common law is a form of case-by-case decision-making, and the doctrine of precedent constrains this decision-making by requiring later courts to treat earlier cases as correctly decided. The relevance of earlier cases is not well understood in terms of rules—they are better understood as a special type of reason.