You absolutely have the right to terminate and receive damages. Your contractor is in breach of contract! What you want to do is raise the stakes on her. First, get an estimate from another contractor of the cost to properly finish the job, including remediating any and all problems that have resulted from her incompetent work to date. Then, send her a certified, return receipt requested letter detailing the history, terminating the contract due to her default, and demand that she pay you an amount of money so that when the other contractor completes the job, you have paid in total no more than you would have paid her had she timely and competently completed the job. Inform her that if she does not comply with your demand within a short specified period of time, you will have no choice but to file a suit against her for your damages. BUT, be sure to specifically mention that if forced to file this suit you will be filing this claim not only as a breach of contract case, but also as fraud, gross negligence, and deceptive trade practice causes of action, which will entitle you not only to your damages, but also an additional amount equal to multiple times your actual damages as punitive damages. That should provide plenty of incentive to comply with your demands; but, if it does not, file your suit. Even if you have to file the suit, that's likely all you will need do. In my experience, she will settle this to your satisfaction without a hearing rather than risk punitive damages and the being on the record.
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