Peter leases a shop to David for $1,500 per week for three years, with a two-year option. At the end of the first year, David closes the business and leaves the shop. Peter incurs expenses of $1,200 in advertising, and finally re-lets the shop to Michael for $1,000 per week.

Required:

Discuss the rights and liabilities of the parties.

Using IRAC Approach (Issue, Rule & Related Case, Application, Conclusion)