Let this family go. Simply give them notice of termination due to their inability to abide by the signed upon contract. Don't give examples or anything just a letter stating the above reason and the last day of care.
If she presses for examples etc just state you will be filling the space with a family that can abide by the contract and respect the written contract (paid stats off etc).
She seems to have the allusion that she was the first to sign on, that you owe her and that you work for her.
Hope the next family is a keeper :-)

































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