Peter, an accountant, lives in an apartment that he leases from Sally for $2,000 per month. In August 2008, Peter invested most of his money in the booming share market only to see his investment halve in the space of four weeks. By December 2008, with his income slashed, Peter was unable to pay his rent and so went to see Sally. She agreed to accept half the rent until December 2010. However, in September 2009, Peter was promoted and the market had improved. Sally wrote and told him he would have to resume paying $2,000 per month in October 2009. His reaction was so negative that she also claimed the rental she had foregone from December 2008 to October 2009.

(a)Please advise Peter whether he has to resume paying the original rental immediately.

(b)Advise Sally whether she could claim the rent foregone (ie $10,000).