What the Contract Said

Vol. 14 No. 8

trustees eletter Vol14 No8 contract

A family at the Montessori Children’s House of Durham (NC) had enrolled their daughter for first and second grade, but wavered on having her attend third grade. The parents were concerned about class size and the teacher time students received. The family eventually re-enrolled the girl, signing a tuition agreement that required the family to pay $12,610 in tuition for the upcoming school year.

The contract specified that parents “understand that they will be obligated to pay the full year’s tuition, and that no reduction or credit will be granted if a pupil is withdrawn unless the withdrawal is made at the specific request of the school for reasons other than nonpayment of tuition.”

After signing the contract, the family heard a rumor the school would increase class sizes from a maximum of 20 students to 24 or 25. The parents, believing their child would not receive the attention they wished, applied to another private school, which accepted their daughter. The family then missed the first tuition payment to MCHD on July 1.

On July 9, the family emailed the school to say their daughter would not be attending, and asked to be released from the contract. The School Head responded with a certified letter reminding them that they signed the tuition agreement and were required to pay the tuition.

When the parents refused to pay, the school sued for breach of contract. The court found in the school’s favor and mandated the family not only pay the tuition, but pay the school’s attorney and court fees.

The family appealed, claiming the school breached its contract by increasing class size, despite what the school’s website and printed materials indicated. The appeals court disagreed. The tuition agreement contained nothing about class size, so MCHD didn’t breach the contract on those terms. Under North Carolina law, the clear terms of the contract are limited specifically to those terms. The appeals court upheld the previous court’s decision. It found that, by the “plain terms of the contract,” the family breached the tuition agreement by not paying that year’s tuition. (Montessori Children’s House of Durham v. Blizzard)

So, what’s the lesson here for other private schools?

Clearly, when developing your school’s enrollment contract or tuition agreement, keep in mind your state’s particular provisions and be specific in your wording and contractual obligations—for both your school and its families. It’s prudent to involve legal counsel when drawing up any school contract. Having a clear-cut enrollment contract may not prevent you from being sued by a dissatisfied family, but, as in the case of MCHD, can work in your favor.

But there is another consideration—constituent relations. Disgruntled parents often reach out to other families in the school to rally like-minded parents. You may win in a court of law but lose in the court of public opinion. Dissatisfied parents and those who sympathize with the family that brought suit against the school will further express their displeasure, doing extreme damage to your school’s image and reputation in the community. Families may even withdraw their children.

So, how can your school avoid this situation? It all comes down to communication.

Before parents sign the enrollment contract, go over the details with them to ensure they understand their legal obligations. Also, be sure you understand their expectations. Be clear on your responsibilities to the families and their children at your school.

Review your marketing materials, website content, and other school publications. How do you describe the programmatic features parents are led to expect? Are the materials congruent with your contract stipulations? If not, address this before it becomes a problem.

Do you have a Director of Parent Relations who can act as a liaison with parents? Having someone in your administration who assumes this role can often address parental issues before they get out of hand.

You cannot meet the expectations of all families. But being clear about your school’s responsibilities and legal obligations goes a long way toward circumventing hairy legal situations.

Note that ISM does not and cannot provide legal advice. Consult legal counsel concerning your school’s enrollment contract and how it is interpreted under your state’s contract law provisions.

Additional ISM resources:
The Source for Admission Directors Vol. 10 No. 4 Enrollment Contracts—What You Need to Know
ISM Workshop: Mastering Enrollment Management

Additional ISM resources for Gold Consortium members:
I&P Vol. 30 No. 8 The True Implications of a ‘Breach of Contract’ Lawsuit
I&P Vol. 36 No. 5 The Enrollment Management Cycle

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