Avoiding Small Claims when Breaching contract

[mikepsy]

I'm a web application developer and I have a contract to build and complete a web presence for my client.

I would like to break the contract with my client. They are very difficult to work with and I have lost tremendous amount of time and money working on their project.

I do not have a break clause in my contract with them. I am also behind on the contract mile stones, and end date.

I would like to send them a certified letter telling them I'm breaking contract and give them a refund.
The refund will be all money paid for programming, but not design (since they use the design now on business cards, bags, billboards, etc).

Is there anything I should send them in the letter or with the letter?

Thanks

 

[dee_dub]

A very carefully worded release. You're probably opening yourself up to a potential claim for lost revenue and the like, and you want to secure their admission that accepting the refund means they release you from any future claims.