My husband and I borrowed money from a ex-friend. We signed a contract with this friend, agreeing to payback these funds. Over the following 2 years, my husband and I paid back this friend as we could, and also paid him through graphics design services as he requested. We still owed him about 2K (if you take out the cost of the graphic design work), when one day he came into my house a physically assaulted me in front of 4 children. Including spitting in my face as he was holding me against a wall. To say the least, the friendship ended this day.

He then sent me a very nasty email, admitting that he assulted me, and in this email, wrote that as of this date and time (listed it out) you are no longer obligated to pay me the $4375.00 (number incorrect). This will resolve any and all contact between you and me.

After proceeding to further trash my family and I, he follows up the email saying that there is to be no contact between us, email or letters. That he will also not contact us.

Every 6 months he sends us a letter demanding payment for the debt (that he put in writing is resolved) and threatening if he does not hear from us by x and x date he will sue us. He sent yet another letter today with no return address that he will file suit if he does not hear from us in 3 days. He brought up in his letter, that he realizes that I am going to use this email in court, to solidify that he nulled our agreement. However, that the original signed contract says nothing about electronic coorospondances being a valid form of communication. (This shows that he did in fact send an email, that says debt is resolved)

I have followed his instructions per this email to a T. I have not contacted him, even though he continues to harass me. Is this email valid? It was sent by him, and there will be no doubt about this from not only his email address, IP address, but the personal information he provided in this email. Does he have a case?

Maybe what you need is for this to go to court to get straightened out. There is a large difference between what you think you owed and what he thinks is owed. Gather your paperwork. Depending on where you live it may or may not be something that can go though small claims.

If you decide to go to court, which seems to be your best option when dealing with a crazy person, be sure to take all of your evidence, including the emails with headers. Many judges have not yet heard of email, so be prepared to explain how you know the email came from the plaintiff. (If the judge is technically inclined, you will be able to skip this step.) Whether the judge will accept the email as evidence is up to the judge. Many judges do accept email as evidence.

Also don't be surprised if the judge says that you owe the money.

... It was sent by him, and there will be no doubt about this from not only his email address, IP address, but the personal information he provided in this email. Does he have a case?

Best way to get this admitted into evidence is to ask him, when he is testifying (in your cross examination), to admit he sent it. Say "Now, about this e-mail you sent me, when you said '__', did you mean '____'?" If he says "No, I meant ____.", you got him: he admits he sent it.

And email may or may not be allowed as evidence, Often they are, but at times you have an issue as to proving they sent it.
Not someone else with access to their computer or password and so on.

As for the assault, was the police called do you have some other proof to this happening ?

In California, email can be used.( a valid point was made regarding who sent it though) I found this out very quickly while in a 3 day trial for my dissolution of marriage.
The petioner's attorney even tried to use something they found on my reunion.com social networking profile.
Judge admitted emails, but did not admit the networking profile.