
[replying to the thread, not necessarily the post I clicked on]
My experience of 'breeding rights' as they were called was that one of the dogs I was interested in in Sweden was owned by one person, but the breeder had a contract that said she retained the breeding rights (meaning she could choose the bitch and got the stud fees) for 3 breedings or 3 years whichever came first. So within that country's KC the owner owned the dog and the dog was registered to her, but the breeder signed the stud forms and received the fees for any breedings that fell under the terms of the contract. Once the term was fulfilled either by date or number of breedings then the rights were back with the registered owner.
So having learned that from my 'continental' experience when I read the OP's post and saw the breeder retained 'stud rights' I just automatically assumed that meant the breeder kept the rights to use the dog as she wished and retained any stud fees from those matings.
I think certainly before you sign a contract you need to make sure exactly what you're signing, and if it's not clear then ask for it to be clarified, and that part of the contract re-written to be made more clear before signing it.
I know hindsight is 20/20 but unfortunately if it's the contract you signed, then you have to honour it or come to some other kind of agreement. Neutering the dog is very likely in breach of contract and depending on the solicitor you each get she could sue you for that and no guarantee which will win.
You really need to work this out personally between you - getting solicitors etc involved (unless as an absolute last resort) will only make things worse, not better.
As for the initial mating where the pups were reabsorbed any stud owner worth their salt would offer a free repeat for a mating that produced no pups irrespective of whether that first mating was free - so regardless of the contract I do believe that the right thing to do is let her have a second mating FOC.
Just my .02