The case centred on the decision of a school to apply a $3785 fee to a father who took his child out of school at the end of the year. The parent gave less than a term’s notice, triggering the penalty under a “withdrawal clause” contained in the school’s contract.

The ruling highlights several risk factors in enrolment contracts that schools should consider:

• The enrolment contract was offered on a “take it or leave it basis”, with no opportunity for the parent to negotiate.
• The school could change the terms of the contract, such as raising fees, without giving the parent the chance to withdraw their child unless they complied.
• Most importantly, the school couldn’t prove they would incur a loss because of the withdrawal. The loss was determined by other factors, such as what stage of the school year the child is withdrawn, and whether new students could be quickly enrolled at the same year level.

The Tribunal did, however, concede that the outcome may be different had the children been withdrawn in the middle of the year, which may expose the school to loss of funding it had already committed to for the rest of the year.

While the decision is not a binding authority in Victoria, schools in New South Wales are treating it as a call to review their enrolment contracts.

If you would like assistance with the terms of your enrollment contracts to ensure any penalties are fairly applied and that they comply with Commonwealth unfair contracts law, please contact our team.