The Muslims during the days of the Prophet Muhammad (PBUH) lived by the shari’ah by following the Qur’an and the sunnah. Sunnah means the example of the Prophet.
Was not the Qur'an enough on its own? The Qur'an is a book of guidance which was sent for the entire human world till the end of time. As such, it only deals with the general issues and mentions only the basic principles underlying the Muslim way of life. The Qur'an is more like a constitution than a book of law. The details were left to the Prophet (PBUH). This is quite clear from the following verses of the Qur'an: He raised up among the common people a Messenger from among themselves to recite to them His revelations, to purify them, and to teach them the Book and the wisdom. (Surah al-Jumu’a, 62:2)
And We have revealed to you (0 Muhammad) the Reminder (that is, the Qur'an) so you may clarify to the people what has been revealed to them, and so that they may reflect (Sura an-Nahl, 16:44).
These two verses definitely prove that Prophet Muhammad (PBUH) was not just a 'mail-man' whose only job was to deliver the Qur’an to us. He was a teacher and a commentator of the Qur'an. Even his actions are a source of guidance for Muslims: You have a good example in Allah's Messenger for whosoever hopes for God and the last day, and remembers God oft (Surah al-Ahzaab, 33:21).
The obedience to the Prophet (PBUH) has been considered as the proof of loving Allah (SWT): Say (OMuhammad), 'If you love Allah, then follow me; (if you do so) Allah will love you and forgive for you your sins.' (Surah aal-‘Imraan, 3:31).
To show the importance of obeying the Prophet (PBUH), Allah (SWT) further says,
Whoever obeys the Prophet has surely obeyed Allah. (Surah an-Nisaa, 4:80)
The Qur'an is not only silent on the details of things which can change over time, it is also silent on the rules of worship which can never change. For example, the Qur'an in twenty-five different places commands the Muslims to say the daily prayers (salat), but not once has Allah (SWT) explained how the Muslims are to say their prayers. (The only exception is that of salatu 'l-khawf, the prayer said in a battle-field or when one is in danger.) This silence on the part of the Qur'an, I believe, was for the specific purpose of forcing the people to go to the Prophet (PBUH), ask him for details and follow his example.

During the Days of the Imams
After the Prophet's death, the Muslims were very much divided on the issue of leadership. This gave birth to the two groups known as the Shi'ahs and the Sunnis. The Shi' ahs believed in the leadership of Imam' Ali bin Abi Talib (a.s.) and the Sunnis believed in the leadership of Abu Bakr.
The Shi'ahs lived by the shari'ah by following the Qur’an, and the sunnah of the Prophet and of the imams.
The sunnah, in Shi'ah definition, means "the sayings, deeds and silent approval of the Prophet and the twelve Imams of Ahlul-Bayt." Although the issue of the leadership is beyond the scope of this study, I would like to mention one reason why the Imams of Ahlul-Bayt are preferable as the source of the shari' ah than anyone else.
The Muslims of the early days realized the importance of the Prophet's sunnah and started to memorize his sayings known as hadith. Later generations preserved the saying they had heard from the companions of the Prophet in the books of hadith. Even the actions of the Prophet, observed by his companions, were preserved in writing. But this process of preserving the sunnah of the Prophet was not immune from mistakes and forgery. Many sayings were invented and wrongfully attributed to the Prophet during the early period of the Islamic history, specially during the Umayyid era. At times, the rulers bribed the companions to fabricate 'hadith' in their favour. At other times, some people invented ahadith for apparently good causes not realizing that they were using wrong means of trying to make people more religious!
In this background of the early development of hadith, we must find an authentic and informed source for the sunnah of the Prophet. When you look at the Muslims of the Prophet's days, you can find no one who was more knowledgeable, informed, reliable and closer to the Prophet than the Ahlul-Bayt, the family of the Prophet: Fatimah, 'Ali and their sons. After all, it is the Qur' an which testifies to their spiritual purity of the highest form by saying,
“'Verily Allah intends to purify you, O Ahlul-Bayt, a thorough purification." (Surah al-Ahzaab, 33:33)[1]
Combine this verse about the Ahlul-Bayt's purity with the following: "It is the holy Qur'an in a preserved tablet, none shall touch it but the purified ones." (Surah al-Waqia, 56:79)
The real sense of this verse is that the Qur’an which is "in a preserved tablet" is not accessible to anyone except those who are purified by Him. This shows that the Ahlul-Bayt could understand the Qur'an better than any other Muslim. It is for this very reason that Allah (SWT) commanded His Messenger to ask the people to love his Ahlul-Bayt: “Say (0 Muhammad), 'I do not ask from you any reward (for teachinf Islam to you) except to love my near ones.'” (Surah ash-Shura, 42:23)
This love was made obligatory because it would automatically entail obedience of those whom one loves. If the Ahlul-Bayt were not truthful, reliable, and worthy of following, would Allah(SWT) command us to love them?
These few verses are enough to show that the best commentators of the Qur' an and the most authentic source for the Prophet's sunnah are the Imams of Ahlul-Bayt. The Prophet (PBUH) himself said, "I am leaving among you two worthy things. As long as you hold fast on to them both, you will never go astray after me. One is greater than the other: the Book of Allah (which is a rope suspended from the heaven to the earth) and my descendants, my Ahlul-Bayt. They will not separate from each other until they come to me at the (fountain of) Kawthar (in the hereafter). Therefore, see how you recompense me by the way you deal with them."
This is not the place to discuss the authenticity of this hadith, but it will suffice to quote Ibn Hajar al-Makki, a famous Sunni polemicist. After recording this hadith from various companions who had heard it from the Prophet at various places and times, Ibn Hajar says, "And there is no contradiction in these [numerous reports] since there was nothing to prevent the Prophet from repeating [this statement] at those various places because of the importance of the holy Book and the pure Family.”
We can conclude from these verses and the hadith mentioned above that the Ahlul-Bayt are the divinely appointed commentators of the Qur' an, and the most authentic and the best source for the sunnah. It is for this reason that we prefer them to all other sources. Even when we quote a hadith from the Imams of Ahlul-Bayt, it is actually the hadith of the Prophet which they have preserved as the true successors of the last Messenger of God.
Imam Ja'far as-Sadiq (a.s.) says, "My hadith is the hadith of my father, the hadith of my father is that of my grandfather, the hadithof my grandfather is that of Husayn [bin' Ali], the hadith of Husayn is that of Hasan [bin 'Ali], the hadith of Hasan is that of Amiru ‘l-mu’minin ['Abi bin Abi Talib], the hadith of Amiru ‘l-mu’minin is that of the Messenger of God (s.a.w.), and the hadith of the Messenger is a statement of Allah, the Almighty, the Great.”
The historical circumstances did not allow the opportunity to the first three Imams of Ahlul-Bayt to teach and train their followers in the matters of the shari'ah. It was after the tragedy of Karbala that the Imams, especially the fifth and the sixth Imams, got the opportunity to formally train their followers in the shari'ah laws. The training by these Imams actually laid the foundation for the development of ijtihad and taqlid among the Shi'ahs after the occultation of the twelfth Imam Muhammad al-Mahdi (a.s.).

During the Ghaybat of the Present Imam
During the Minor Occultation (ghaybat) of the present Imam, it was still possible for the Shi'ahs to present their problems to the Imam through his specially appointed representatives. These representatives were 'Uthman bin Sa'id al-'Amri (260-265 A.H./ 875-879 C.E.), Muhammad bin' Uthman al-'Amri (265-305 A.H./ 879-917 C.E.), Husayn bin Ruh (305-326 A.H. /917-937 C.E.) and 'Ali bin Muhammad al-Samiri (326-329 A.H./ 937-940 C.E.).
However, after the Imam went into the Major Occultation, the problems of the shari'ah were resolved through the process known as ijtihad and taqlid -- the two most important ways of living by the shari'ah.

Summary
· During the days of the Prophet (PBUH), the Muslims lived by the shari'ah by following the Qur'an and the sunnah.
· During the days of the eleven Imams and the Minor Occultation of the Present Imam, the Shi'ahs lived by the shari'ah by following the Qur'an and the sunnah of the Prophet and the Imams.
· During the Major Occultation of the Present Imam, the Shi'ahs, based on the training given to them by the previous Imams, developed the system of ijtihad and taqlid. Under this system, one group of the community studies the science of Islamic laws, specializes in that field and produces mujtahids. The non-mujtahid Shi'ahs, who obviously forms the majority, follows the opinions of the mujtahids of their time in shari'ah matters.

Note:
[1] For details on this verse, see Rizvi, S.S.A., Imamat: the Vicegerency of the Prophet (Tehran: Wofis, 1984) pp.49-54