Since both parties are in agreement as to what actions were taken, why don't you show us the contract so that we can determine who acted appropriately?
This sounds like a bad idea. We are not King Solomon, nor should either party want his help. For simplicity's sake, neither party should take the opinion of anyone other than a lawyer on this.
Leave that to lawyers. The HN audience is savvy, but I don't think most of us are capable of legally interpreting an agreement without taking a side on the matter first.