I teach at an International School in Kuwait. My current contract expires on 31 August 2012 and in January I was asked to sign a letter of intention saying that I intend to remain at the school for the year 2012-2013. At the time this was my intention, so I signed it. For several reasons, I changed my mind and in March, I informed the principal of my change of intention. The school then informed me that I am now under contract until August 2013, even though I had signed no extension to my current contract. They have threatened to sue me (and my wife) for a full year's salary, accommodation costs, advertising costs, recruitment costs and whatever other costs they can think of if we don't return in August and work another year. Any ideas?