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Seek legal council now.

Other than that: What does your contract say about this?

Even if the contract does say something like "contractor has to be proficient in these technologies: ..." and explicitly mentions Node.js defining what proficiency actually means in a a specific case is no easy task. In most cases, there's no simple distinction between good code and bad code, especially one that's going to hold up in court.

Who's the auditor? He or she might be biased because they might've been tasked with finding issues with the code so the client can save money.

As I said: Get a lawyer to sort these things out.

Don't give in to attempts by the client to 'settle" outside of court. Building an actual legal case from this will cost the client a considerable amount, too. It's more likely they're trying to get some leverage to threaten you with.

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