What is my obligation to honor the terms of this contract if they have not done so?

I am a service provider and my client and I have a contract that states payment terms are net 10 days. Payment was not made for 34 days past due. The client is seeking a refund due to letting go the placed applicant prior to the 90th day which in out contract states is the garurantee. What is my obligation to honor a refund of payment if the client has not honored the payment terms?