If you enter into a sales contract selling some gadget, then you are legally required to deliver that gadget, which also means you are required to deliver it without defects (unless those were agreed upon in the contract as properties of the gadget to be sold). If you happen to so far only have delivered a defective gadget, you haven't fulfilled your contractual obligations. You cannot refuse to fulfill that contractual obligation just because the buyer refuses to agree to additional terms that you ask them to accept.

Details obviously depend on the jurisdiction, but the basic principle probably applies just about anywhere.