Adam is employed by Sun Ltd as a buyer of materials at a salary of HK$26,000 per month. Adam's job requires him to visit various manufacturers of solvents and to buy solvents which can be used in the manufacture of polish. Recently, Adam placed a large order with Moon Ltd, a company with which Sun Ltd had not previously dealt. The solvent delivered by Moon Ltd is slightly more expensive than that delivered by the previous supplier, but Adam insists that it is definitely of higher quality. Adam also switched a regular order to Star Ltd, a small company with which Sun Ltd had not previously dealt. The solvent delivered by Star Ltd is slightly cheaper than that delivered by the previous supplier. It appears to be of exactly the same quality. The managing director of Sun Ltd was watching the FA Cup Final on the television when he noticed Adam sitting in the crowd. The managing director has now discovered that Adam went to the Cup Final by courtesy of corporate hospitality supplied by Moon Ltd. The managing director also discovered that Adam has a significant shareholding in Star Ltd, and that the solvent supplied by Moon Ltd is of no higher quality than that previously supplied.

From the perspective of law of agency, advise Sun Ltd as to their legal position against Adam.