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Tom borrows $1,000 from Sam. It is agreed that Tom will repay all the money on the 10 May.
On 9 May Tom tells Sam that he cannot repay all the money but that he thinks he could raise $700 by the next day. He asks Sam whether he would accept $700 in full settlement of the whole debt.
Sam agrees to accept the $700 in full settlement of the debt. On the basis of Sam's promise, Tom manages to round up the $700 and pays it to Sam on 10 May.
The following week Sam sees Tom and demands the $300 balance of the loan.
( apply the IRAC method to answer ):
(a) Advise Tom whether he is legally obliged to pay Sam the remaining $300
(b) Would your advice in (a) be different if Tom had offered Sam $700 plus a box of chocolates, which Sam happily accepted?
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