rr - I think you did the right thing in contacting them in writing to withdraw from the business commitment and provide them alternate solutions. He had no right to yell at you! And, yes, how great that you found this out early in the relationship, while you could still get out!
How did the conversation end? Did you respond in some way, or did you hang up and walk away?
Either way, give yourself a pat on the back! Some headaches just are not worth it!
Hugs and butterflies,
~T~