The greater risk to the contractor is that this advertises that they deal with shitty clients who don't have those things in place. Working with what sound like fly-by-night clients signals that you're not able to be picky about your work.
If I were the contractor here, I'd bury the project and sprinkle some holy water on it, pursue legal action, and get on with my life. I wouldn't draw attention to what is essentially a failed project. It's naive for the contractor to think that everyone will accept his side of the story regarding the project's failure. From a distance, the failed project is more visible than the flaky client.