I noticed that there is a thread on Breach of Contracts! I am incliend to to tell them that I am not returning in August, but this blacklisting thing scares me. I feel that I have been emotionally extorted as well as financially.

You will know of course you should not have gotten involved in the first place- let this be a learning curve for you. What you now must do, for your own self-respect, is to play the game out and finish the contract. It won't do you any harm-good character-building stuff. Don't slink away with tail between your legs-bit of the stiff upper lip is what is required of you now. Always stand your ground in life-don't run away from your own mistakes.