Marketing messages in enrolment contracts

A student at a private school in Minnesota suffered a severe brain injury when she was struck on the temple by a golf ball hit by another student during class. 

The children were practising in golf nets using hard golf balls when the girl walked out to fetch her ball at the same time as a boy hit his ball which struck her. Not surprisingly, her parents sued the school and golf instructor for negligent design, construction and maintenance of the golf net, and for negligent supervision.

There was an indemnity clause in the enrolment contract in which the parents agreed to hold the school harmless from all damages arising from personal injury. In Australia, such clauses in enrolment contracts were reasonably common some years ago. I had thought that they were now extinct until I spotted one the other day.

The Minnesota indemnity clause read:

“In signing this contract, I subscribe to the terms as herein set forth. I furthermore agree to hold the School harmless from all damages arising from personal injury or property loss. I understand this contract applies to the 2002–3 academic year only and that no further obligations by either party are express or implied.”

The Court said this was too broad in its scope and therefore unenforceable.

In the US, as in Australia, indemnity clauses in school enrolment contracts will be read strictly in the context of the contract as a whole. To the extent that there is any ambiguity, the Courts will construe the indemnity in favour of the parents. Schools must therefore be very careful when they insert any form of indemnity clause into their enrolment documents.

But there is a bigger issue here. Indemnity clauses are used to transfer risk. In the school situation, the school is seeking to transfer the risk of being found liable for injury to a student away from itself and onto the student’s parents.

Having successfully attracted parents to enrol their child at your school, the inclusion of this type of clause means that your school’s first formal engagement with those parents is, “Send your child along but don’t expect us to bear any responsibility if our negligence causes your child to be injured”. This is a difficult message to sell. And it’s one that doesn’t have to be sold. There are other ways to transfer risk; for example, through insurance.

With some of the pressures of 2023 abating, take the opportunity to revisit your enrolment conditions. What messages are they sending to prospective parents? What messages do you want to send?

Keep in mind that the enrolment contract is different from commercial contracts where parties negotiate hard to get the best deal for themselves. Schools and parents are not seeking the best deal for themselves; they are seeking to enter a relationship through which a child will receive an education. An enrolment contract formalises the partnership between the school and the parents to achieve the common aim of providing excellent outcomes for the student. As such, enrolment contracts should be relational contracts.

This is not to say that enrolment contracts should not protect schools. The enrolment contract should of course deal with the payment of fees and other related issues. However, it should not only deal with those issues. If an enrolment contract only deals with money, the parents may get the (hopefully) wrong idea that the school is only concerned about getting its fees. If an enrolment contract includes indemnities, the parents may get the (hopefully) wrong idea that the school is only concerned about avoiding liability and that it doesn’t care for the wellbeing of its students.

Enrolment contracts should be simple, friendly and expressed in clear language that is easy for the parents to understand.

Use your enrolment contract as an opportunity to build a strong and lasting relationship with each new family joining your school community.

I’d love to work with you in making this a reality.