If you have entered into a contract in good faith and find that the other party has not lived up to their part of the deal then the contract is breached. Once a breach has occurred the other party is no longer liable for upholding their part of the agreement. If the injured party has already completed part or their entire portion of the agreement, then they can take actions to get restitution for damages they sustained.
One option is to talk with the breaching party and come to an agreement for a settlement out of court. You may accept a partial payment, or recovery of expenses you incurred due to the loss of business, materials, or labor. If you are not able to talk civilly with the breaching party, you may want to bring in a mediator to help negotiate a settlement offer that both parties will agree to. However, if a settlement is not possible and the amount of damages is greater then $3,000 - $7,000 (depending on the state requirements), then you can take the breaching party to small claims court.