Choosing childcare is one of the most important decisions a parent makes — and one of the most expensive. The average annual cost of centre-based childcare in the US exceeds $10,000, and in many metropolitan areas it rivals college tuition. Yet the contracts parents sign often receive less scrutiny than a gym membership. Daycare contracts frequently include overbroad liability waivers, punitive cancellation fees, and vague policies about sick days, closures, and schedule changes that can cost families thousands of dollars over a year.
What is a Cancellation and Liability?
A daycare contract (also called a childcare enrolment agreement) is a service agreement between a parent or guardian and a childcare provider — whether a centre, family daycare, or in-home care provider. The contract typically covers the days and hours of care, tuition and fee structure, payment terms, holiday and closure schedules, illness policies, pick-up and drop-off procedures, liability provisions, and termination/withdrawal terms. Daycare providers must be licensed by their state, and the contract must comply with state licensing regulations.
Red flags to watch for
A waiver that attempts to release the daycare from liability for injuries caused by their negligence or the negligence of their staff is likely unenforceable in most states but creates a chilling effect on parents bringing valid claims.
Many daycares charge full tuition during closures for holidays, teacher workdays, and maintenance. This can amount to 2–3 weeks of paid-for but unreceived care per year.
A rigid 30-day notice requirement with no exception for families who move, lose employment, or have other urgent changes forces parents to pay for a month of care they won't use.
Annual registration fees of $200–$500 plus supply fees that are non-refundable, even if you withdraw within weeks, function as hidden cost increases.
A clause allowing the provider to increase rates with only 2 weeks' notice gives you no practical ability to find alternative care before the increase takes effect.
Your legal rights
Daycare facilities in the US must comply with state licensing requirements, which are administered by each state's Department of Health and Human Services (or equivalent). State licensing rules govern staff-to-child ratios, health and safety standards, background check requirements, and facility conditions. Under general state contract law, liability waivers for a provider's own negligence in the context of childcare are disfavoured and often held unenforceable — courts in many states (including California, New York, and Virginia) have refused to enforce such waivers as against public policy. The Americans with Disabilities Act (ADA) requires daycare centres to make reasonable accommodations for children with disabilities. State consumer protection statutes (e.g., state UDAP laws) may also apply to unfair contract terms in daycare agreements.
Questions to ask before you sign
- 1Does the liability waiver attempt to cover the daycare's own negligence, or only inherent risks of childcare?
- 2Am I charged full tuition for weeks the facility is closed — and how many closure days are there per year?
- 3What is the withdrawal notice period, and are there exceptions for urgent circumstances like relocation or job loss?
- 4How much advance notice will I receive before a tuition increase takes effect?
- 5What happens if my child is sent home sick — am I charged for that day?
- 6Are all non-refundable fees clearly disclosed before I sign, including annual registration and supply fees?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.