Rashid is in the business of import and export of sugar. He has been buying sugar from Discount Suppliers Limited (‘DSL’) for many years. Last month, while Rashid was abroad, DSL offered to supply sugar at a 5% discount to the prevailing market price. Rashid told his manager, Ali, to place an order with DSL for the supply of 1,000 tonnes of sugar. On a friend’s suggestion, Ali also put in some of his own money and placed an order for 1,100 tonnes (1,000 tonnes for Rashid and 100 tonnes for Ali) with DSL at the discounted price. 1,000 tonnes of sugar has since been exported. The remaining 100 tonnes of sugar was sold by Ali in the local market at a profit. Rashid has returned and discovered what has happened. Ali is of the view that since he had invested his own money the profit is his to keep.Required:Under the Contract Act, 1872, advise Rashid whether he is entitled to the profit made on the local sale of 100 tonnes of sugar. (10 marks)
