The constitutionality of termination clauses in independent school contracts

At the outset and before delving into the matter at hand, contracting parties are reminded that the principle of pacta sunt servanda (agreements must be kept) applies unless the contract offends public policy.

In the recent constitutional case of A B and Another v Pridwin Preparatory School and Others, an independent school decided to terminate contracts between themselves and the parents of two boys attending at the school. Significantly, the termination was based on the inappropriate actions of the parents and not the two boys.

In this case, clause 9.2, the termination clause of the contract came under constitutional scrutiny. The issue at hand was whether an independent school can enforce termination clauses without affording the parties to the contract, specifically the affected children, a hearing prior to contemplating termination.

The majority of the judges found that it was unconstitutional for the school to not have afforded the parents and the children an opportunity to be heard, and that they did not take into account the best interests of the children.

The majority based their ruling on the premises that when a contract has an effect on constitutional rights, a party cannot contract out of their obligations in terms of the constitution.

The constitutional rights that were affected in this matter included the right to basic education and a child’s best interests. A child’s best interests are of the utmost importance when dealing with matters concerning a child.

Since an independent school inevitably provides for a basic education, they have a duty not to diminish this right. When considering whether to terminate a contract between the school and parents, schools are ultimately terminating the relationship with the children too and so naturally the children’s best interests must also be considered.

In light of the above, the Court held that an independent school is required to follow a fair process when it contemplates the cancellation of a parent contract. This fair process does not necessarily contemplate an oral hearing, but rather a fair opportunity to make representations concerning the best interests of the child. This opportunity must not only be extended to the parents of a child, but the child too, given that it is the child’s interests which must be considered.

Ultimately, the Court found that the decision to terminate the parent contract was constitutionally invalid (even though it complied with the terms of the contract itself) due to a lack of procedural and substantive fairness having been followed prior to its termination. The court found that the audi alteram partem rule must be adhered to, meaning let the other side be heard as well irrespective of the terms of the contract.

While both majority and minority concluded that a termination clause in a contract concluded between an independent school and parents, is not unconstitutional in and of itself, it will be unconstitutional if there is no fair process followed prior to termination of the contract.

Thus, independent schools must provide reasons for termination and allow all parties, including the children, an opportunity to be heard even if their contract does not strictly provide for this.

For more information relating to independent school contracts kindly email us on info@hjw.co.za.

Written by Meegan Reddy – Candidate Attorney.

This article is provided for informational purposes only and should not be substituted for legal advice on any specific matter. Any opinions expressed herein are subject to the law as at the time of writing and will change in accordance with any change in the law. We recommend that you contact HJW Attorneys at info@hjw.co.za directly for advice applicable to your specific matter.