Help? Client is demanding a full refund?

That is what is running through my head. I'm not a lawyer myself and nowhere near one for that matter but the contract covers a lot from milestone payment, cancellation, approval, confidentiality / NDA etc..

I'll let him escalate it and show them the contract, show I have reasoned on my side for a generous settle that he has declined. I don't want to risk loosing my paypal account as I know its possible in these situations.