Enrolment contracts and notice

When you accept a place at a non-government school, you usually sign an enrolment agreement or accept the school's terms and conditions. Most families skim it. Then circumstances change: a job moves interstate, a child is unhappy, money gets tight. Suddenly the notice period, the deposit terms and the clause about fees in lieu of notice matter a great deal. This guide explains common enrolment terms, what the unfair contract terms laws say, a tribunal decision about school notice terms, and how to protect yourself. It's general information, not legal advice.

Common terms in enrolment contracts

Every school's terms are different, but look out for:

• Application fees: often non-refundable.
• Acceptance deposits or bonds: whether they're refundable, credited against fees or forfeited, and when.
• Fees and payment terms: due dates, late payment charges and consequences of non-payment.
• Fee changes: whether and how the school can change fees, levies and charges during enrolment.
• Notice to withdraw: how much written notice you must give before your child leaves, often a full term.
• Fees in lieu of notice: what you'll be charged if you give less notice than required.
• Behaviour and suspension: when the school can suspend or end an enrolment.
• Changes to the school: whether the school can change the curriculum, programs or facilities.
• Privacy, photos and technology: how the school uses information and images.

Ask for the terms before you pay a deposit and read them properly. If something is unclear, ask the school to explain it in writing.

Unfair contract terms: the basics

Most school enrolment agreements are standard form contracts: the school prepares them and families have little or no chance to negotiate. Standard form consumer contracts are covered by the unfair contract terms protections in the Australian Consumer Law.

The ACCC explains that a term may be unfair if it:

• would cause a significant imbalance in the parties' rights and obligations;
• is not reasonably necessary to protect the legitimate interests of the business; and
• would cause financial or other detriment to the other party if relied on.

Courts and tribunals also consider whether the term is transparent, meaning expressed in plain language, legible and readily available, and look at the contract as a whole.

The NSW Government's guidance notes that a term found to be unfair is void, meaning it doesn't bind the consumer, while the rest of the contract can continue.

Since 9 November 2023, the ACCC says it has been illegal for businesses to propose, use or rely on unfair terms in standard form contracts, and penalties can apply. Before that change, unfair terms were void but not prohibited.

A tribunal decision on school notice terms

In 2022, the ACT Civil and Administrative Tribunal considered a Canberra school's enrolment agreement in Brindabella Christian Education Ltd v Respondent XD [2022] ACAT 37. The agreement required a term's written notice before withdrawal, and charged fees for that period if notice wasn't given.

The tribunal found the notice term was void as unfair. Its reasoning included that the agreement allowed the school to vary fees and other matters unilaterally, without giving parents a corresponding right to leave without penalty, which created a significant imbalance. The school also did not show the term was reasonably necessary to protect its legitimate interests, and the term caused detriment by charging for services that weren't provided.

This decision turned on the particular contract and facts. It doesn't mean every notice term is unfair, and schools have legitimate reasons to plan staffing and enrolments. But it shows that school enrolment terms are not beyond the reach of consumer law, and that the balance of the whole contract matters.

Before you sign

• Read the whole agreement, including any policies it incorporates by reference.
• Note the notice period and calculate the date by which you'd need to give notice to leave at the end of each term or year.
• Check what happens to deposits and bonds if you withdraw before starting or leave later.
• Look at fee change terms: how much notice of increases is given, and whether you can leave without penalty if fees rise.
• Ask questions in writing and keep the answers.
• Ask for changes if a term seems unfair. The ACCC suggests consumers can ask the business to remove or change a term before agreeing.

If you need to leave

1. Check the notice clause and give written notice as early as possible.
2. Talk to the school. Explain your circumstances. Schools may waive or reduce fees in lieu of notice in some situations, such as relocation or hardship.
3. Keep records of all communication.
4. If you're charged and believe a term is unfair, raise it in writing, referring to the unfair contract terms protections.
5. Seek advice from your state or territory consumer protection agency, a community legal centre or a lawyer if the dispute continues.

Moneysmart also recommends contacting the school early about payment difficulties, because hardship arrangements may be available.

Other contract issues

Changes in circumstances. Some contracts say what happens if a student is expelled, if a family separates, or if fees are unpaid. Know these before a crisis.

Who is liable. Many contracts make both parents or all signatories jointly liable for fees. That matters after separation.

Debt collection. Ask what happens to unpaid fees and whether accounts are referred to collection agencies.

A plain-language checklist for the agreement

Before signing, try to answer these questions from the document itself:

• What do I pay, when, and what happens if I pay late?
• Can the school change fees during the year or between years? How much notice will I get?
• If fees rise, can I leave without paying fees in lieu of notice?
• How much notice must I give to withdraw, in what form and to whom?
• What exactly am I charged if I give less notice?
• What happens to my deposit or bond in each scenario: never starting, leaving early, finishing school?
• In what circumstances can the school suspend or end my child's enrolment, and are fees refunded?
• Who is liable for fees if parents separate?

If you can't answer a question from the document, ask the school to explain in writing. A clear contract protects both sides.

Keeping copies

Keep a copy of the agreement you signed, the fee schedule at the time and any later notices of changes. Policies incorporated into the agreement, such as fee or withdrawal policies on the school's website, can change. Download or print the versions in force when you enrol and each year after, so you have a record if a dispute arises.

Key points

• Enrolment agreements are contracts; read them before paying a deposit.
• Check deposits, notice periods, fees in lieu of notice and fee change terms.
• Unfair terms in standard form consumer contracts are void, and since 9 November 2023 they're prohibited.
• A 2022 ACT tribunal decision found a school's one-term notice term unfair in the context of that contract.
• If you need to leave, give notice early, talk to the school and get advice if there's a dispute.