Dispute with Web Design Company

After a great deal of research into what kind of programmer to use, local or foreign, freelancer or a company, I decided to use a local firm that I was referred to by a student of the company's owner. He is a professor at the university in town as well. He was extremely enthusiastic and seemingly knowledgeable about what I was going for. The price tag was around 10k with 2k required up front and the rest to be paid after the project was completed. The estimated time to complete the project was 8 weeks. A mobile version was to be included.

I agreed to the conditions and paid the 2k and letting him know I had to have it done by July (This was late February).

Fast forward to last week, 15 weeks in and the project was nowhere near completion. I let him know last Wednesday, the 15th, in a respectful manner that I was not pleased with the progress nor some some of the work they had done. We had originally agreed to use a different graphic designer but he used one in house that was cheaper. I receive no response so I emailed him again Monday mid-day to reiterate what I had said Wednesday. Keep in mind I was never rude in any way. His response later that afternoon appalled me.

He stated that I was clearly dissatisfied with their product and that unfortunately our relationship was irreparable. He then went on to describe that according to their term's of service there was no refund for deposits but he would be "kind" and give me half back ($1000) along with the map design that I expressed my discontent with and a dictionary for the database but no actual code. He attached a contract his attorney had drawn up and that was that.

Now I am a month and a half away from deadline, I have formed an LLC, and met with an accountant as well as several other businesses to set this venture up. I am losing half of my deposit. It will be very difficult to have this completed in time starting from scratch.

The legal loophole he used to bail on me is that they offer no warranties, expressed or implied, in their terms of service for their products or services. I just never imagined something like this would happen. I have tried contacting him and he is very short using only legal jargon and says he wishes me the best while maintaining he is doing me a favor. I am pretty sure he just doesn't have time because he is a professor and a PhD student finishing in December.

Is there anything I can do about this? Any advice is appreciated. This is a learning process and all I can do is view it that way but it is nonetheless extremely frustrating and unethical in my opinion.