We entered into a contract with a homeowner to build a deck/addition in February 2019. Signed a contract and received a materials deposit, then the homeowner (an architect) started the process to obtain the permit. Throughout this process, they made design and structural changes. We proposed an addendum to the contract for the changes in July 2019, they verbally accepted but never signed the addendum nor made the additional deposit to cover the changes. We put the project on hold throughout winter (the project involved pouring concrete footings and the property is located in southwest Washington state, very wet over winter which is impossible for concrete). March 2020 homeowner advised they had the permit and requested a meeting to go over the build. June 2020 we had the meeting wherein the homeowner requested additional changes, which we needed to subcontract. We waited on the sub to provide us a bid for almost two months, during which the homeowner made additional change requests. Eventually the sub declined the project, which caused us to decline the project, as we were unable to complete the standing requested scope of work. July 25 we emailed to terminate the agreement and proposed a refund payment plan, withholding a certain amount about 25% of the original deposit) for the work we had done to accommodate their many change requests. Last week (late August 2020) we received a letter from the homeowner's lawyer threatening to sue us and our surety bond for breach of contract. By definition, is the homeowner similarly breaching contract, having not followed through on verbal agreements to sign the addendum and make the deposit? They demanded we complete the contractual scope of work, but that structure would be illegal, since the permit for the project describes a very different structure due to the homeowner's changes.