You haven't said why they don't want to continue.
If you want to retain them as a customer for the future, give back what they haven't had.
If you want a legal dispute, you can ignore them. At some point they will make a claim. If you lose, and the liklihood is you will, you'll end up paying costs, too, and have an unhappy customer that is unlikely to come back to you. Worse still, you could end up with a reputation, thereby sending other business away.
You could win, however, it will take time and effort on your part, and you will still have an unhappy customer.
Having taken people to court, I can tell you that the courts look for terms and conditions. If there are none, then it's up to the court to decide based on the case presented. If they have a good lawyer, you're going to have to fight to stop them winning.
Without written terms and conditions, you're in someone elses hands.
Oh, and as you're in the UK, the Trading Standards may get involved.
Another alternative is, instead of saying no, renegotiate the deal.
Finally, take legal advice.
Finally, finally, get some terms and conditions for the future.