Under the plan, a third party could sue the store where a present was purchased A new law reform proposal has been unveiled conferring rights on third parties, such as gift recipients, to sue for breach of contract even if they did not purchase the item or sign the contract themselves. If the proposal is approved it would mean, for example, that if someone buys a 'new' mobile phone from a retailer as a gift for a friend, the friend herself could sue the shop for breach of contract if the phone turns out to be second-hand. Under current law, it is only the actual purchaser who has the right to enforce the promise made by the shopkeeper. The proposal, detailed by the Law Reform Commission in a consultation paper issued last week, calls for an amendment of existing legislation on privity of contract, which allows only the parties to a contract to enforce it. The present law effectively means that in a case where parties A and B enter into an agreement in which A agrees to pay a third party, C, a sum of money on B's behalf, C cannot sue A if A does not fulfil its obligation. The commission considered the matter and found that 'strict adherence to the existing privity doctrine can prove artificial and contrary to the parties' intention, and can lead to injustice and inconvenience'. The doctrine has already been repealed in Australia, England, New Zealand and Singapore. Under the recommendations, the parties to a contract can explicitly confer legally enforceable rights on a third party. But the commission also proposes that even if there is no such explicit provision, the third party may enforce his rights unless there is a specific provision against it in the contract. The proposal requires that the third party should be expressly identified by name, description or reference to a class. For example, all future occupants of a flat could be covered by a contract between a contractor and its employer since they are all members of a 'class' of people. The chairman of the subcommittee on the matter, barrister Benjamin Yu SC, said the privity doctrine was 'unduly complex, uncertain and artificial' and, while aspects of it needed to be retained, an exception was needed. 'What we propose is a general and wide-ranging statutory exception to the privity doctrine,' he said. 'If the parties prefer, they will be able to make it clear in their contract that the proposed legislation is not to apply to their contract.' A consultation paper is available on the website of the Law Reform Commission. Comments can be submitted until August 31.