What does res judicata signify in legal contexts?

Res judicata is a legal doctrine that means "the thing has been judged" in Latin. It signifies that a final judgment or decision made by a competent court is conclusive on the parties involved and prevents them from re-litigating the same issues in any future lawsuits. This principle aims to promote finality and efficiency in the judicial process, ensuring that once a dispute has been settled, it cannot be contested again between the same parties.

When a court decides a case on its merits, the outcome becomes binding. This includes not just the specific claims that were litigated, but also any matters that could have been raised during the initial litigation. Therefore, the correct answer emphasizes the finality of a court's decision as it relates to all issues between the parties, underscoring the importance of allowing legal matters to reach a conclusion and avoiding the burdens of endless litigation over the same issues.