"Shit happens" is a common slang phrase, used as a simple existential observation that life is full of imperfections. It has become a well-known meme.
This phrase was featured in the movie Forrest Gump, where a minor character steps on an unspecified object, implied to be dog excrement. When the main character, Forrest, observes, "It happens," it supposedly inspires the minor character to spawn the "shit happens" slogan.
The slogan has inspired a series of satirical jokes on religious and philosophical definitions, circulating around the Internet. See List of "Shit happens" jokes.
See also:
Shit Happens is also the name of a webcomic, and a 2002 Norwegian short film. The plot of the latter concerns the adventures of a character who needs to relieve himself.
Spinoffs
Sith happens was jocularily used in fan circles as a placeholder for the name of Star Wars Episode III: Revenge of the Sith when the movie's name had not yet been revealed.