  Models with a dynamic cosmological term \Lambda (t) are becoming popular as
they solve the cosmological constant problem in a natural way. Instead of
considering any ad-hoc assumption for the variation of \Lambda, we consider a
particular symmetry, the contracted Ricci-collineation along the fluid flow, in
Einstein's theory. We show that apart from having interesting properties, this
symmetry does require \Lambda to be a function of the scale factor of the
Robertson-Walker metric. In order to test the consistency of the resulting
model with observations, we study the magnitude-redshift relation for the type
Ia supernovae data from Perlmutter et al. The data fit the model very well and
require a positive non-zero \Lambda and a negative deceleration parameter. The
best-fitting flat model is obtained as \Omega_0 \approx 0.5 with q_0 \approx
-0.2.
