As in resit exam, something unique - at least in my experience - to UK Universities.
The idea is sound though, a logical extension of what is called continious assesment; if you have done well in course work during the semester, but have messed the final exam bad enough to fail the class, an exam board may, at their discretion, allow you to resit the exam.
It seems like a reasonable idea; I get myself so worked up at the thought of failure on an exam, that I've been known to puke.
Resit exams allow one to not be penalised for what effectively amounts to a bad exam day.