This assignment requires you to answer a problem-type question using the ILAC (Issues, Law, application, conclusion.

Christopher is an inventor who has patented a new process for making electric batteries for cars. On 3 January he registers a company called E-Volt Pty Ltd with ASIC. Christopher is the sole shareholder and Managing Director of the company.

On 2 January Christopher had signed a contract with Australian Metals Ltd in terms of which Australian Metals would supply 2 000 kg of lithium, a crucial component of batteries. The contract specified that both payment and delivery would take place on 25 January. Christopher signed this contract as 'Christopher Court, Managing Director, E-Volt Pty Ltd'.

The manufacture of car batteries also requires the manufacture of specialised microchips. On 6 January, Christopher signed a contract to buy a machine that can produce microchips costing $ 2 million from Microchips Pty Ltd. He signed this contract as 'Christopher Court, Managing Director, E-Volt Pty Ltd.' The contract required E-Volt Pty Ltd to pay for the machine in three instalments of $ 300 000, the first instalment falling due on 1 August. The machine was delivered and battery production began.

Subsequently, in order to raise more capital for E-Volt Pty Ltd Christopher persuades a number of relatives to invest in the company. Because he issues a large number of shares, Christopher ends up no longer having a majority holding in the company, and on 15 January the shareholders elect a new board, consisting of Mary, Jane and Sarah. Mary is elected as the new Managing Director, replacing Christopher. The new board met on 20 January and decides not to proceed with the contract with Australian Metals Pty Ltd as they believe that they can source lithium more cheaply from another supplier. They sent a letter to Australian Metals informing that company that E-Volt would not pay for, or take delivery of, the lithium.

Christopher also decides to branch off privately into the business of selling firearms - for which legislation requires a licence. The legislation prohibits the granting of a licence to 'any person who has a criminal conviction involving drug possession.' Unfortunately, Christopher had been convicted of drug possession during his student days, so he registers another company, Albury Firearms Pty Ltd, of which he owns 99 shares and his wife, Elizabeth, 1 share, with himself as Managing Director and his wife as Company Secretary. He asks Elizabeth to lodge an application for a licence on behalf of the company with the Firearm Sale Control Board.

On 10 July, the employees at E-Volt Pty Ltd go on strike, and because this, the company's income was severely reduced and it was unable to pay the $ 300 000 instalment to Microchips Pty Ltd. Meanwhile, Albury Firearms Ltd has received a letter from the Firearm Sale Control Board refusing the licence application, citing Christopher's previous conviction as its reason.

Christopher has now approached you for legal advice in relation to a law suit brought against him by Australian Metals Pty Ltd for breach of contract, a law suit brought agianist him by Microchips Pty Ltd claiming $ 300 000, and the letter received by Albury Firearms refusing the licence.