It does kind of sound like they might want to take you to court, but if it is clearly stated in your contract then you should be okay. But, I would documenteverything immediately and if you have any witnesses, even better! Write down exactly what happened and when and how you dealt with each incident. In fact, yuo may even want to print out this thread from the forum to show that you were consulting others about the situation (it's close to having witnesses). It can take a long time before you are called to court and you may not remember. Plus, it will help your case to have the documentation. You did the right thing! I wouldn't have kept them as clients either!