If you have done every possible attempt as a contractor to resolve a major dispute with the client, not to go to court, and

Best seek an advice from an independent3rd party to understand the consequences of going to court and how would the court role in this case, and before making a decision of taking a big loss.

Try and negotiate with  the client. Go for arbitration, if the contract provides.

BEST WAY IS TO USE SOME INFLUENTIAL THIRD PARTY TO MAKE HAPPY ENDING ADJUSTMENT OUT OF COURT................ GOOD DAY

I would go for arbitration 

I agree with Mr. Jetley and Mr. Al-Yazoeri, a third Party is arbitration, but... try to negotiate with the contractor , so he wind, you win, so the client wins on both ways

Sir, A mediator solution-- even go for a deep discount.--some losses are inherent to every kind of business even though we have all the justifications.

I will spare him resort to the court by his desire

After the entry into force of all the friendly methods

Some good answers are written below, I echo with most of the answers and will add one thing that, whenever there is a conflict the Project Manager need to be impartial to both parties, listen and understand, and explain to parties to have win-win situation..

Always try to resolves any issues between you and the client before taking it to the court. You always want to keep the positive relationship.