Fine China Pty Ltd is company which makes crockery which it sells to department stores. It has three directors, Abby, Bob and Charmaine. The board appointed Dennis as Chief Purchasing Officer, with responsibility for buying raw materials.

The company has a select range of china which uses gold paint around the rims of cups, saucers and plates. After a series of thefts from the company premises, the board decides that the gold paint should be stored with Strong Box Pty Ltd, a storage company that has high-security premises guarded 24 hours a day. If Fine China needs any gold paint, then it can be taken from the supply kept by Strong Box upon presentation of a withdrawal form which both companies agree must be signed by two directors of Fine China.

Dennis frequently buys clay for making dinner services from Hard Clay Pty Ltd, and has often dealt with Egbert who is the regional sales representative for Hard Clay. Dennis and Egbert have made an appointment to meet at 3.00 pm to sign a contract in terms of which Fine China will buy $ 50 000 worth of clay from Hard Clay. At 12 noon that day, Egbert meets Frances for lunch. Frances is an old school friend of his who happens to work at Fine China. She says We have had a terrible morning at work the directors have been angry with Dennis, and I think he might be fired. When Egbert goes back to his office after lunch, he tells Greg, his boss, about the conversation with Frances, saying I think that Dennis job is in trouble. Greg says Nonsense we need this order, so dont embarrass Dennis by saying anything. When Dennis arrives at Egberts office at 3.00 pm, the contract is signed.

It transpires that Dennis had in fact been fired by the board of Fine China at 1.00 pm. It also transpires that, after signing the contract with Hard Clay, and to get revenge on the company for firing him, Dennis went to Strong Box Pty Ltd, presented a form with forgeries of Abby and Bobs signatures, and withdrew Fine Chinas gold paint, which he then sold before disappearing overseas, where he is untraceable.

Fine China has refused to accept delivery of the clay or pay for it, stating that it did not need more clay and that in any event Dennis had been fired by the time he signed the contract. As a consequence, it has now been sued by Hard Clay for breach of contract. Fine China itself wants to sue Strong Box for the value of the gold paint, arguing that it should not have released the gold paint to Dennis on the basis of a forged withdrawal form. Advise Fine China on the likely outcome of each case, citing full authority.

answer a problem-type question using the ILAC (Issues, Law, Application, Conclusion) format,

Please note that the limit of 1 000 words is strict