Legal Standing: Definition, Example and Related Terms
What is Legal Standing ?
To establish legal standing, three key elements typically need to be proven: 1. The party has suffered an actual injury or concrete harm 2. There's a causal connection between the injury and the challenged conduct 3. The injury can likely be redressed by a favorable court decision
In commercial contracts, legal standing is particularly important as it determines who can enforce contract terms or seek remedies for breach of contract. For instance, only parties to the contract or intended third-party beneficiaries typically have standing to sue for breach of contract.
Understanding legal standing is crucial for contract managers and legal professionals because it helps determine whether a potential legal action is viable and who has the right to bring such action. Without legal standing, a court will dismiss a case regardless of its merits.
Example(s)
Scenario Description A supplier breaches a contract with a manufacturer by delivering defective materials. The manufacturer has legal standing to sue because they are a direct party to the contract and have suffered actual harm through receiving defective materials. However, the manufacturer's customers who might be indirectly affected by delayed production would likely not have legal standing to sue the supplier. A contract includes provisions benefiting a specific third party. If the contract explicitly names a third-party beneficiary, that party would have legal standing to enforce the relevant provisions of the contract, even though they weren't one of the original contracting parties.