An action or decision that later serves as an example

Answer: An action or decision that later serves as an example is "Precedent"

Explanation:

An earlier incident or action which is considered an indicator or a reference to be used in similar circumstances afterwards is termed as "Precedent". There are two kinds available as persuasive precedents and binding precedents.

A precedent or authority is a legal case in common law legal systems that sets out a principle or rule. The court or other judicial bodies then use this principle or rule when deciding later cases with similar matters or facts.