What does your contract say? Was the contractor to install a yard, and if so were there any restrictions.

While 2" seems large depending how the lawn is created determines if they are too large. ie if he is going to spread four inches of top soil they may not be a problem

the client hired me. He didnt want to go with the contractor's landscaper (i guess there is a trust issue between them). But the contract the client sign for me doesn't state any thing on rock clean up (unfortunately).

Sorry I missed you were the landscaper

I guess the conflict is now between the client and the contractor.

You need to do what the contractor says and if he says nothing about stones in the contract then there are no stones to turn.

What is the understanding with the contractor about site preparation, Is that mentioned in the contract?

I will try to find out whats in the contract tomorrow. Thank You !

There is a machine you can rent called a clinker that will sift out the rocks and let the soil fall back through. Call around to rental outfits to see what they have that will help you. Some of these devices can handle a lot of soil at once. Others can only handle a little. Sounds like the contractor has left all this stuff at the surface, so you won't need to get a back hoe in there. Probably you could loosen the surface with a box blade and shovel it into a clinker and get it done in a day.

I highly doubt the contract says anything about removing excess rocks in lawn area.
I had a lot of rocks in the crap topsoil the builder was putting in. I told his guy to stop and to leave. I then hired a landscaper to rent one of those machines to remove the original rock and what the contractors guy put in. We then out down screened topsoil and sod.
I have a tiny tiny yard, but that work cost me a little over 2k. I would not use sod again, as it really didn't impress me. I only got it so my little dog had somewhere to "go" when we first moved in.

I know I had to absorb extra costs, but in the long run, I think not having rocks pop up after a hard rain or just wear and tear was worth it.

I agree jeannie01. Rocks will plague you forever.

Sometimes sod is the only solution. It depends on where you are and how you plant to maintain the lawn. If you're talking about fescue and/or Kentucky bluegrass, then seed can work better than sod. If you're in the south, you probably will want bermuda or St Augustine sod, but not always. Sometimes deep mulch is better than any grass. It depends on what you're doing in the yard.