If you are interested in working with/through Kaggle on a longer-term basis, finding some solution outside of a lawsuit would be something to think about. You are getting a chance to interact with them and maybe build contacts that could be useful down the road. If the offer was insulting and/or you don't want to work with them down the road, that is another matter. When you start bringing in lawyers on both sides it becomes an entirely different matter than what it "right". It becomes a costly legalese/terms/courtroom issue. Good luck either way.