Home Daycare Series: Why a Well Written Contract Is So Important

Over the last nearly 7 years of running a home daycare, I have found that a well written contract is the best way to run your business smoothly. A contract not only protects you if things go south with a client and your need proof to present in small claims court, but it prevents miscommunication between you and your daycare families.

When I first started my home daycare, my contract was maybe three pages. Even then it was more thorough than others I have seen in the past. However over the years, I have tweaked it to be very detailed, and is now about 8 pages long.

A contract should explain what services you are willing to provide, what is expected from your daycare families, and what happens in certain situations if the agreement is broken.

Contracts are an easy tool to use to avoid conflict. It is much easier for you to correct a family from taking advantage of you by referencing the contract, then it is to try and remind them about the conversation you had during the interview a year ago. If you are in a verbal agreement, it is easy for a family to say, “Oh I didn’t understand or I would not have agreed to that.” You have a much firmer upper hand if you can point to where it says it in the contract and where they signed in agreement. This goes too for parents, a provider can promise you the moon, but at the end of the day it is what is in the contract that will be enforced in small claims court.

Contracts can also help providers weed out potentially troublesome families before they even start. I always send out my contract to my families before I have them come for the interview. If they were to message me with concerns about late fees. I let them know that late fees are only a problem if they are late for pick up. I have had potential families then tell me that my hours of operation are very tight for them and they are concerned they maybe “a little late, from time to time”… Well right there I can make the choice, take them and set in my contract an extra small charge to stay open late or cancel the interview.

Another red flag for me is when people do not want to put a deposit down. My deposit is used for their last month of care should they give proper notice. Also it is non-refundable should they decided they really don’t want the spot and are still shopping around, but don’t want me to fill it before they make their decision. This helps me screen and not waste my time with people who are not serious about the spot, or who don’t want to give proper notice when they leave.

So far I have only talked about how a contract protects the provider, however it is very powerful for a family as well. I would never put my child in a daycare without a contract. I want to know which days I’m expected to pay, what happens so my deposit if the daycare closes, what is the policy on discipline, etc.

Contracts protect parents from providers that are constantly changing the rules. It give you a point of reference if there is a conflicted. You as a parent can look back and refresh your memory, “Did I really agree to that?”, “No that is not mentioned in the contract” or “Oh yes here it is, I must have forgotten that.”

Contracts allow families to plan according to an actual agreement. Contracts allow providers to provide full disclosure of the daycare rules. Contracts help avoid conflicts. However should conflicts occur, contracts are there to make sure that in small claims court the actually agreement will be honored.

Check out my video on The Importance of Daycare Contracts

As a provider what is the most important part of your contract? As a parent, what are you looking for when you read over a contract?

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