Find a lawyer. It looks like you're definitely out of 'hey forum friends, what should I do' territory.
Make sure you build a case, keep copies of any and all communications (emails, contracts) that you've had with this character and make sure you don't lose a thing.
A single email can make all the difference if this ever goes to court and it might be a while before you get there, ideally you'd have started building a case long ago, but now it is definitely time to get organized.
If you should go to court, the major advantage you will have if you are organized is that you can present your case in a way that someone can follow. A case is like a piece of software in that respect, if it looks like 'spaghetti' then you will have a hard time arguing it, if it is nicely structured with layers building upon other layers you will stand a better chance to come out ahead.
You must be one heck of a nice guy to hand over money without getting anything in return. Get an estimate from your lawyer before you hand over even more thousands! Whilst you appear to have a case of breach of contract, you could quickly multiply your losses through litigation, the time, effort money and distraction that it poses. You could weigh up the impact of all of these on your time-to-market. If it's a really great idea, then you might need to re-group and attack again whilst the opportunity is still good.
Consider the fact that he could be the one that is sued, it is best to be prepared.
Yes, lawyers are expensive, but you'd be surprised how effective a single letter from a heavyweight attorney can be, and it won't cost you a fortune at all.
But you have to explain your case to your attorney too, and that is where that documentation comes in again.
Yeah, paper trail started last week, aside from the email history. I appreciate the comments - it's an unusual situation.
My attorney is up to speed, it's just a question of whether or not it makes sense to engage in arbitration.
I'm mostly curious to see if anyone has ever done that, chased an uncooperative contractor into that, obtained an injunction, etc.
wrt not receiving anything in return, a non-functional prototype never seemed like a useful thing to have ... until now =) Although it worsens his case significantly.
Make sure you build a case, keep copies of any and all communications (emails, contracts) that you've had with this character and make sure you don't lose a thing.
A single email can make all the difference if this ever goes to court and it might be a while before you get there, ideally you'd have started building a case long ago, but now it is definitely time to get organized.
If you should go to court, the major advantage you will have if you are organized is that you can present your case in a way that someone can follow. A case is like a piece of software in that respect, if it looks like 'spaghetti' then you will have a hard time arguing it, if it is nicely structured with layers building upon other layers you will stand a better chance to come out ahead.
Good luck with this!