Problem
You've hired a contractor to do a small remodel on a portion of your store and, as is the custom, the contractor required half of the money up front ($2,500). After several weeks, the contractor still hasn't begun work. You reach out to him and he informs you that, because of shortages on lumber, he is not able to complete the work at the contracted fee. He states that the half you paid up front is not even enough for him to pay for all of the materials, let alone pay his employees to do the work. To make matters worse, he claims that he's already spent the $2,500 on some of the supplies, and on paying an architect to review the plans. He tells you that if you want the job done, it will cost you double, meaning that you'll have to pay him another $2,500 now, and $5,000 upon completion of the work.
You've reached out to him and informed him that you're considering filing a lawsuit for breach of contract, but that you've also looked into mediation and arbitration. The contractor informs you that he'd be willing to mediate or arbitrate, but you're still considering filing a lawsuit. What do you believe is the best course of action, and why?