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Ben sold clothes at a market stall on weekends for a number of years. Two years ago business was very poor and Ben was forced to cease trading. Ben sold all of his remaining stock to a competitor at well below cost. Unfortunately, Ben had insufficient funds to pay his main supplier and creditor Alfred. He was still in debt to Alfred for $60,000.
Ben borrowed $25,000 from his brother and negotiated with Alfred in relation to the debt. He agreed to give Alfred $25,000 at the time of their discussions, and to work as a taxi driver on weekends until he could repay Alfred another $15,000. Ben agreed to this arrangement as full and final payment of the debt.
After two years of driving taxis, Ben has repaid Alfred the additional $15,000. Alfred now insists that Ben must still pay him the remaining $20,000 of the original debt.
Required:
Advise Ben and Alfred in relation to this matter.
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