Does paying someone in advance bind you to an unsigned contract?

Legal Advisror,

I pre-paid a new childcare provider $300 on the Friday before she was to begin caring for my step-daughter in her home. My step-daughter's maternal grandmother called Sunday evening to say she did not approve of the lady caring for her grandchild because she was not a "licensed" childcare provider. When I called the lady and apologized for the change she refused to give me my money back. She gave us a contract but I had not signed it. Do we have any grounds to take her to small claims court to get our money back? Or are we bound to the "unsigned" contract because I gave her payment (in advance). No services were rendered. She's claiming she doesn't have to give money back because she did not refuse her services. Please help! $300 is a lot to us but we don't want to throw away additional money for court fees! Thank you!

Susan

is she operating legally?

have city officials check

if not you clearly can get a refund, or you may argue you were told it was implied that she was licensed

if need be sue in small claims