P leased commercial office space from the lessor on the basis that D was going to occupy (sublease) the north-west corner of the premises. When the parties realised that the lease prohibited a sub-lease to D, and that D would not have lawful occupation, D refused to go ahead with the deal. P's expectation was that a sub-lease contract would have been made with D.

Required: Discuss the legal circumstances of the agreement between P and D.