If client has no agreed right to back out, the client is repudiating the contract. You may be able to sue for your lost profits. That's generally why you take deposits--to have something that will at least partially cover you if client backs out.
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You may have rights under your contract and you may have rights to file a mechanics lien against the property. Read your contract to determine what, if any, right your customer has to back out at this point. Your contract may specify what damages you may recover when this happens. If its silent, you should seek recovery of all costs you incurred to pull permits, buy, deliver and return materials. If you are holding a deposit, you may be able to offset it to reimburse yourself for allowable damages. You will want to review this all with a lawyer who will review your contract, explain your lien rights and then send the appropriate demand letter to your customer to refute their demand for a refund and assert your rights and demands resulting from the customer's breach.