You can but there are consciousnesses to your actions. You would most likely be in Breach of contract and possibly opening yourself up to lawsuits and liability.
Just curious why the change of heart. It must have taken a little bit of time in escrow and some time on the market.
The short answer is "You can do whatever you want!"
The hard part comes next. What will the consequences be and are they worth the benefits? And, as others will soon tell you, that is going to become a legal issue dealing with contract law, etc. I recommend the Scottsdale Law Group, Kristi Collins, (480) 478-0709. They also consult in Tucson.
Now, please let us know what would cause a homebuyer to want to back out at such a late date...just how bad can things be with the house, or did you discover something wrong at the last minute?
Good luck. Some one is not going to be too happy... :(