My wife is a bestselling author, so I've gone over these contracts and publishing standards extensively. There are standard, boiler-plate publishing practices included in most contracts, however if the author has a major agency with a legal department the contracts are often tweaked and modified subject to negotiation. That said, the publisher almost always gives themselves an "out" in the contractual language. Most of the time there are multiple clauses allowing them to pull out of publication for specified reasons, or for no reason at all.
Typically the contracts are paid in thirds -- a third on signing, a third on "acceptance" of revisions and drafts, and a third on publication. So she's definitely out the on-publication third, and depending on where she is in the drafting process she could be out the "acceptance" third. She could also fight back with her own legal team, of course. The publisher, could even go after her for the signing money if they have the nerve and willpower. Ultimately though, it depends on how Deen's agency negotiated the specifics of whatever contract the publisher proposed, and of course who wants to dig-in and fight for the money the hardest.
What's interesting for me is that my wife used to be with Ballantine/Randomhouse. I'm glad she and her agent decided to dump them for a different publisher.
Just sent Random House/Ballantine a short but sweet note expressing my dismay and future support of their products.
I hope they take a financial smacking over this...