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It seems to me that he has terminated his contract with you because he has breached the terms of the contract by refusing to complete the work.
He cannot blame you for hiring someone else when he has made it clear he is refusing to do the work, even after you have said you will hire someone else.
And yes I agree that he would not be entitled to more than what you originally were going to pay for the full project less what you have to pay someone else to do the work he has failed to do.
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