Wow, what a mess.
R paid A $2000 of $5000 that he was going to pay for a lot of content, that's for certain. There is no explicit mention of this $2000 being a deposit where it would not be returned either in full or in part if the contract is terminated, but this may have been agreed on.
A reads the contract.. $5000 was supposed to be paid in full by 8/15, and the content was to be delivered by 9/15.
A spent that $2000 while waiting for the additional $3000 which R didn't pay because A had spent the money on other things rather than start shooting.
Well, there's no reason why A can't spend the money, however, it would be wise business practice to ensure that he has $2000 on reserve in case of contract termination, and it would have been a "good faith" move to have started shooting with the $2000 already paid, in anticipation of the $3000 forthcomming.
Now, something happened that terminated the contract. R decided he didn't want to pay any more money because A hadn't started shooting with the $2000 he already had and spent, A wanted R to pick up the equipment and the money, R never did, A spent the money on something else and apparently it is gone, and it is unclear if A has an additional $2000 on hand to return.
So, what should be done?
If you ask me, I think Aaron needs to pay. He needs to return the $2000 because no content was delivered and the contract was terminated, that is if the $2000 wasn't explicitly a non-refundable deposit. If the written contract includes a $750 termination fee, then Aaron needs to pay $1250. If the written contract explicitly includes that the initial $2000 of $5000 was a non-refundable deposit, then it has to be determined who exactly terminated the contract and why. If Rory terminated it, then I would say that he forfeits a large portion if not all of the deposit, if that is what it was. If Aaron terminated it, then he needs to refund Rory a large portion of the deposit for breaking the contract.
*whew* And I thought it was really funny when Rory closed with "..and go fuck yourself."
