Northampton have pledged to "vigorously defend" themselves against any legal action after withdrawing Cameron Shepherd's contract.
The Australia international had been due to move to Franklin's Gardens on a three-year deal earlier this month from Super Rugby franchise Western Force.
However, the Saints decided to pull the plug on the 28-year-old's move on medical advice after discovering a problem with his left ankle.
Shepherd has since joined Sale on a one-year contract, though his agent, Mark Fordham, issued a statement saying the player was planning to take action against Northampton.
The Aviva Premiership club have responded by releasing their own statement, standing their ground after consultation with one of the leading ankle specialists in the UK.
"Northampton Saints had been prepared to sign Shepherd, who when fit is a talented player, on a generous three-year contract," the statement read.
"Once terms had been agreed, the club flew lead physiotherapist Matt Lee to Melbourne to conduct the player's medical.
"During this medical, material information about Shepherd's left ankle came to light, about which the club had not been aware during the contract negotiation process.
"The player's ankle joint was scanned and the results sent to one of the UK's leading ankle specialists.
"Relying on his expert opinion, the club concluded that it was unlikely that Shepherd would be able to contribute fully to the club's squad throughout the three-year term, and decided not to proceed with the contract.
"It should be noted that while Shepherd has subsequently signed for Sale, it has been widely reported that this is for one year and not three, with the Sharks' director of rugby Bryan Redpath commenting: 'We're hoping to get him fully fit'."
Northampton also insisted they kept Shepherd and his representatives fully informed of developments throughout the process.
The statement concluded: "Although the Northampton Saints management feel it necessary to make this statement to refute Mr Fordham's allegations, the club does not anticipate making any further comment until the matter has been concluded.
"The club will vigorously defend any legal proceedings which are served."