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Morally, I'm sure most people here think the vendor here is in the wrong. But morals have nothing to do with the relative strengths and weaknesses of a vendor's ability to rescind or terminate a sale contract. Its a complex and technical area of contract and property law. Apart from the...

Just no. If you're actually serious about this then get a lawyer. DIY dispute resolution is not the way to go if you have no idea what you're doing.

Strategically, if that was the crap I got from the other side in negotiations, then I would be advising my client to send back a pretty aggressive letter back. If anything, a letter like that weakens the vendor's case because its so rubbish - and I would point that out, among other things...

That's what they're relying on to try and pull out of the contract? Falls pretty far short of something that actually means anything in contract law.