Is there a termination/cancellation clause / lack of performance / non-performance etc?
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What does your contract say? Did you break a part of it or not
Did you pay on time?
A Contract doesn't mean much, IT alone won't manage client's expectations or mortar a Relationship together.
All it can do is Telegraph what will happen, in slow motion, should those boundaries and expectations dissolve.
You still have to be willing to defend the terms, and go through litigation to force any penalty.
I was CTO of had a Web Development firm I founded with a friend for 6 years. We decided to let folks walk all over us, and then just cut and run if they didn't like us. It was finally a squabble over $500 that took US down, as few humans were as non-litigious as we were.
It's often easier to fire shit-clients than go through all the emotional shit to let them keep living in your head during Small Claims, Appeals, and then I.P. Trials.
You need to decide which hills you want to die on, and also let this become a learning experience that teach you better Communication, Culture, and shore up your Operating Procedures.
If you can't mediate it your Selves, then you get to let an Agent of the Court do it for you.
If you paid late, I'd also tell you to fuck off. bad payers are not good for business