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The Basics of a Contract |
by Tom Copeland
Family child care providers are generally free to construct their own contract with the parents of the children in their care. There are two exceptions:
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Some state licensing rules define what should be in your contract, so check with your local licensor before finalizing your agreement.
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Federal anti-discrimination laws make it illegal for providers to discriminate in their contract on the basis of race, color, gender, religion, age, disability, or national origin. Your state or local government may add additional categories such as sexual orientation.
Other than these limitations, providers can establish whatever rules they want in their contract. All contracts, however, should contain the following four clauses:
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The names of the parties to the contract (the parent(s) and the provider), as well as the name(s) of the children.
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The terms of the contract: the days and hours the provider is open and the parent fees for care. These are the only rules that can be legally enforced by a court of law. In other words, if the provider refuses to provide care on a particular day that is covered by the contract, the parent is not legally required to pay for that day. If the parent refuses to pay for care that is covered by the contract, the provider can go to court to enforce this rule.
All other rules established by the provider are not legally enforceable. These are defined as policies such as: authorized persons who can pick up children, illness and emergency policies, activities, meals, naps, toilet learning, discipline, etc. If a parent or provider is unhappy because the other person is not abiding by these policies, the solution is to end the agreement, not take the person to court. -
The method to terminate the contract. Usually providers will require parents to give them at least a two week written notice before the agreement can be terminated. We recommend that providers do not require the same notice for them to end the contract. Instead, providers should include this language: "Provider may terminate the contract at will." The reason why providers should do this is to allow themselves to immediately end the agreement if a parent becomes disruptive to their business (such as making a false complaint to licensing, bad mouthing to other parents, threat of violence, etc.).
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Signatures of the parent and provider. When both parents are caring for their child, providers should get both parents to sign their contract so that it can be enforced against either parent.
Make Sure Your Contract is Clear
Good communication is key in any relationship. It is particularly important when dealing with parents in your child care business. Providing clear information is important whether you are discussing what activities the children participated in that day or the rates that you charge.
When establishing a contract, terms can be established either verbally or in writing. The biggest disadvantage of a verbal contract is that the terms can be misunderstood. The legal disadvantages of a verbal contract are that it can terminated immediately by either party and that all the parties must be in complete agreement at all times. These disadvantages make a verbal contract very difficult to work with and enforce.
When the terms of the contract are written, the chances of misunderstanding are much less. Your expectations can be clearly written, such as pick-up times. A written contract can also explain any consequences of violating any terms, such as late fees. This creates a document that can then be referred to if there are questions regarding any of the terms. Any change to a written contract must be in writing. You can add an addendum to the contract or write out a new one. In either case make sure the parent signs it. If a change to your written contract is not put in writing, it can't be enforced.
A written contract also gives you the opportunity to discuss how you run your child care business. This discussion can reduce misunderstandings as you can answer any questions or discuss any concerns about the terms immediately with the parents. The combination of the discussion and the written document will help reduce misunderstandings between you and parents.
Reduce Misunderstandings
Have you ever given a parent a break and not enforced your late fee or some other term of your contract? If so, you should include the following language in your contract:
Failure to enforce any term or provision in this contract does not invalidate that provision, term, or any other provision or term of this contract. If you want to begin to enforce the contract term immediately, write an addendum to your contract, with the following language, have the parents sign it, and give them a copy:
Effective immediately, all terms of the contract signed on _______ (fill in date contract signed) will be enforced as written.
Another contract tip ─ Consider the following language:
Fees incurred due to returned or nonpayment of checks will be the sole responsibility of the parents.
Add or edit the following language to fit with your situation:
Any additional costs due to returned checks will be due within 3 days of notice to you and are subject to late payment fees.
For all of the contract language cited above, if you want to add any of the statements to your contract you can either rewrite your contract or draft an addendum, have your parents date and sign it, make a copy for the parents, and keep the original with the contract.
If the parents are not living in the same house, but share child care expenses, be sure to go over your contract with both parents. Have both parents sign the contract. This will make it easier to enforce the terms with both parents. This is good practice even with parents who live in the same house. Even parents who are "happily married" split or just might disagree with the terms when it comes time to enforcing your contract.
This handout was produced by Think Small (www.thinksmall.org).
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