Aristotle takes on Solon, who says that only the dead are truly happy.
In more practical terms, perhaps what this means is that a person can't truly be called happy until his entire life has been completed and no further bad fortune can befall him.
But there are some people who say that both good and bad things can happen to the dead. For whatever fortunes his descendants have, the dead person can feel.
Aristotle isn't having any of this. He thinks it's too ridiculous that a person, who's been fortunate in life, should have to suffer for his descendants.
He says that it's also strange to think that we have to wait until the end of a person's life to decide if he's been happy or not. It's as though all happiness can be erased by one disaster at the end.
Aristotle says that this "perplexity" is brought about because of a tension between human works and activities motivated by virtue.
When a person engages in virtuous activities, they're more lasting in the minds of the people around them, no matter what else happens to the person.
And no matter how bad things get, a virtuous person will always be happy because of his blameless works.
While Aristotle won't allow that small changes in fortune will make much difference in the life of a man, he does concede that large reverses in fortune can bash a person's overall happiness.
However, a truly noble person will come out on top, virtue shining through.
He would also never do anything base or horrible, so technically, nothing bad should really happen to him.
There is one proviso, of course. If something truly, cosmically catastrophic were to happen (i.e. like what happened to Priam of Troy), he couldn't possibly be happy.
At least not right away. It's possible that, even after a catastrophic event, such a person could recover his happiness. It would just take a really long time.
So, to sum up: if a person lives a complete live in accordance with virtue and comes to his death in a reasonable way, he's considered happy or blessed.
But he's a blessed human being—which means that during his life, he may suffer some reverses of fortune.