Daycare Contracts: What Should Be Covered?

A daycare contract explains the business arrangement between a family and provider and helps both sides prepare for common problems.

A clear agreement should answer practical questions before the first day of care:

• When is tuition due?
• Is payment required during vacations or closures?
• What happens when a child is sick?
• Who may pick up the child?
• How much notice is required to leave?
• Can the provider end care immediately?
• Are deposits refundable?
• Which policies can change during enrollment?

ChildCare.gov advises families to sign a contract covering the details agreed upon. Parents should compare it with the handbook, enrollment forms, and verbal promises.

This guide explains the major topics a daycare contract should address. Because contract and child care laws vary by state, it is educational information rather than legal advice.

Contract, Handbook, and Enrollment Forms: What Is the Difference?

Child care programs often use several documents.

The contract

The contract usually covers the business relationship, including:

• Tuition and payment dates
• Deposits and registration fees
• Schedule and hours
• Closures and absences
• Withdrawal and termination
• Refunds
• Signatures and effective dates

The parent handbook

The handbook often contains day-to-day policies, such as:

• Illness exclusion
• Medication
• Meals
• Safe sleep
• Discipline
• Transportation
• Clothing and supplies
• Communication
• Emergency procedures
• Photo permissions

Enrollment and authorization forms

Separate forms may cover:

• Emergency contacts
• Authorized pickup people
• Health and immunization records
• Allergy or medication plans
• Field trip permission
• Transportation authorization
• Photo and video consent
• Sunscreen or topical products
• Developmental or accommodation information

If the contract incorporates the handbook, ask how it may be changed and how notice will be provided.

Basic Information the Contract Should Identify

The contract should clearly identify the parties and the care arrangement.

Look for:

• The provider’s legal or licensed business name
• The program’s address
• The parent or guardian names
• The child’s full name and date of birth
• The child’s expected start date
• The regular days and hours of care
• The classroom or program type, when relevant
• The contract term
• The date the agreement becomes effective
• Contact information for official notices
• Signatures and dates

Confirm that the name on the contract matches the provider you researched through your state or territory’s licensing system. A trade name may differ from the legal entity, but the relationship should be clear.

The contract should also explain whether it is:

• Month-to-month
• For a fixed school term
• For a full calendar year
• Automatically renewed
• Replaced by a new contract after classroom transitions

If the agreement renews automatically, look for the notice needed to prevent renewal.

Tuition and Payment Terms

Tuition terms deserve close attention because small ambiguities can become expensive.

The contract should state:

• The exact tuition amount
• Whether tuition is weekly, biweekly, monthly, or based on attendance
• The payment due date
• Whether payment is made in advance or after care
• Accepted payment methods
• Where or how payment is submitted
• Whether electronic payment fees apply
• What happens when a payment is returned
• Whether receipts are provided
• When tuition may increase
• How much notice is given before a rate change

Ask whether the quoted rate applies to the child’s current age, classroom, or schedule only. Infant rates may differ from preschool rates, and part-time rates may change when days are added.

For automatic withdrawals, keep the authorization and payment schedule and monitor transactions for accuracy.

Registration Fees, Deposits, and Advance Payments

Programs may charge one or more upfront amounts.

These may include:

• Application fee
• Waitlist fee
• Registration fee
• Security deposit
• Enrollment deposit
• Supply fee
• Activity fee
• Advance tuition
• Annual renewal fee

The contract should identify each charge and explain:

• Whether it is refundable
• When it becomes nonrefundable
• Whether it holds a specific opening
• Whether it is credited toward tuition
• Whether it may be applied to the final week or month
• What happens if the provider cannot offer care
• What happens if the family changes its mind
• Whether the fee must be paid again after withdrawal

A payment called a “deposit” is not automatically refundable. Ask for written terms and a receipt.

Schedule, Attendance, and Changes in Care

The contract should describe the child’s regular schedule.

Look for:

• Approved days of attendance
• Drop-off and pickup windows
• Whether care is full-time or part-time
• Whether unused days can be exchanged
• How temporary schedule changes are requested
• Whether extra days are available
• The rate for additional hours or days
• Whether the provider may change classroom placement
• What happens when the child ages into another program
• Whether school-age care changes during holidays or summer

Confirm whether you are purchasing specific hours, days, or a reserved space.

Ask how much notice is needed to:

• Add or remove a day
• Change arrival or pickup time
• Switch between full-time and part-time
• Pause care temporarily
• Move to a different classroom
• Change from school-year to summer care

The provider may not be able to approve schedule changes when staffing, ratios, or enrollment are affected.

Late Pickup and Early Drop-Off

Late pickup terms should be specific.

The contract should state:

• The official closing time
• Whether a grace period exists
• When late fees begin
• How fees are calculated
• Whether the charge is per child
• How repeated lateness is handled
• Who is contacted if a parent cannot be reached
• When emergency contacts are called
• What happens when no authorized adult arrives

Some programs also charge for arriving before the contracted drop-off time. Ask whether early arrival is permitted and whether advance approval is required.

Repeated late pickup may lead to termination even when fees are paid. The contract should make this clear.

Absences, Vacations, and Holding a Space

Many parents assume they pay only when their child attends. Many providers, however, charge based on enrollment because staff and classroom space are reserved.

The contract should explain whether tuition is owed when:

• The child is sick
• The family takes vacation
• The child stays home for another reason
• The parent’s workplace closes
• School is closed
• The child is suspended temporarily
• The family is waiting for medical clearance
• The child attends only part of a scheduled week

Ask whether families receive:

• Vacation weeks
• Personal days
• Tuition credits
• Makeup days
• A reduced holding rate during extended absence

If a program offers vacation credit, check the notice required and whether the child must have been enrolled for a minimum period.

Provider Closures and Holidays

The contract or handbook should list scheduled closures.

These may include:

• Federal or state holidays
• Staff training days
• Provider vacation
• Professional development
• Maintenance days
• Seasonal breaks

It should also explain unscheduled closures caused by:

• Severe weather
• Power or water loss
• Building damage
• Public health events
• Staffing shortages
• Provider illness
• Government orders
• Unsafe indoor conditions

The main financial question is whether tuition remains due.

Policies vary, so the agreement should clearly describe what families should expect.

Illness and Return-to-Care Rules

The contract may refer families to a detailed illness policy in the handbook.

Review:

• Symptoms that require exclusion
• When a parent must pick up a sick child
• The time allowed for pickup
• Return-to-care requirements
• When a medical note is required
• Rules for fever, vomiting, diarrhea, rash, or contagious illness
• How exposure notifications are handled
• Whether tuition remains due
• What happens if a parent repeatedly refuses pickup
• Whether the provider may require exclusion beyond the written minimum

Ask whether the provider follows licensing rules, public health guidance, or a stricter policy.

Avoid vague language giving the program unlimited discretion without explaining the health or safety basis for exclusion. At the same time, providers need reasonable authority to respond to symptoms that may put other children at risk.

Medication, Allergies, and Medical Needs

The agreement should explain how the program handles health needs or point to a written policy.

Important topics include:

• Medication authorization
• Original packaging and prescription labels
• Storage
• Documentation of each dose
• Emergency medication
• Allergy action plans
• Dietary restrictions
• Staff training
• Availability of trained staff throughout the day
• Field trips and transportation
• Changes to a child’s medical plan

For children with serious allergies, asthma, seizures, diabetes, or other medical needs, use a separate written care plan when appropriate.

The contract should not promise services the provider cannot safely deliver. Parents should disclose information necessary for safe care, and providers should explain any limits before enrollment.

Discipline, Suspension, and Expulsion

The contract or handbook should identify permitted and prohibited discipline practices.

Look for language addressing:

• Positive guidance
• Redirection
• Conflict between children
• Biting, hitting, or elopement
• Toileting accidents
• Parent conferences
• Behavior support plans
• Suspension
• Expulsion or termination
• Privacy of other children
• Emergency removal for immediate danger

The agreement should explain what support occurs before behavioral termination, except when immediate safety requires action.

ChildCare.gov encourages families and providers to build strong communication and address concerns early to help prevent unnecessary suspension or expulsion. Ask how the program works with families when behavior may relate to disability, communication, development, trauma, or unmet needs.

Authorized Pickup and Custody Issues

The program should release a child only to authorized people.

Review:

• How parents list authorized pickup adults
• How authorization may be changed
• Identification requirements
• Minimum age for pickup
• Emergency pickup procedures
• Whether verbal authorization is accepted
• Rules for separated or divorced parents
• How court orders are handled
• What happens when an impaired adult arrives
• When law enforcement or child protection may be contacted

Families may need to provide current court documents when someone is legally restricted from pickup.

Withdrawal by the Family

The contract should explain how a family ends care.

Look for:

• Required written notice
• The length of the notice period
• Where notice must be sent
• Whether tuition is due during the notice period
• Whether attendance is required
• Whether the deposit is applied or forfeited
• What happens when notice is shorter than required
• Whether prepaid tuition is refunded
• How belongings and records are returned

Stopping attendance may not end the payment obligation when paid notice is required.

Termination by the Provider

The provider should also explain when it may end care.

Possible reasons include:

• Nonpayment
• Repeated late pickup
• Failure to provide required records
• Unsafe or threatening conduct by an adult
• Repeated policy violations
• The program’s inability to meet the child’s needs safely
• Serious behavior creating immediate danger
• Closure of the program

The contract should identify:

• Whether notice is normally provided
• Situations allowing immediate termination
• Whether a refund is issued
• Whether the deposit is applied
• When belongings and records are released
• Whether the family may appeal or meet with management

Broad language allowing termination “at any time for any reason” deserves careful review.

Changes to Policies or Tuition

Some contracts allow the provider to change rates or policies during enrollment.

The agreement should explain:

• What may be changed
• How notice is delivered
• How much notice is given
• When the change takes effect
• Whether families may withdraw without penalty
• Whether a signature is required
• Which document controls when terms conflict

Keep copies of every version you receive. An emailed update, app notice, or revised handbook may affect the agreement.

Disputes, Liability, and Legal Clauses

Some contracts contain legal provisions that deserve extra attention.

Examples include:

• Liability waivers
• Indemnification
• Arbitration
• Mediation
• Attorney fees
• Collection costs
• Governing law
• Venue
• Severability
• Electronic signatures

A clause is not necessarily enforceable simply because it appears in a contract. Consider local legal review when language waives negligence claims, limits important rights, requires arbitration, or creates substantial financial exposure.

Questions to Ask Before Signing

Ask for plain-language explanations. Revise terms only with the provider’s agreement, and have both parties initial changes. Never sign blank forms; keep the final contract, handbook, addenda, receipts, and notices.

When to Seek Legal Advice

Many contracts are straightforward, but local legal advice may be useful when:

• A large amount of money is at stake
• The contract includes arbitration or broad liability waivers
• The provider refuses a refund after failing to provide care
• A child is terminated in circumstances involving disability or discrimination concerns
• The provider changes terms without the required notice
• There is a dispute about injury, supervision, or alleged abuse
• A collection demand appears inconsistent with the agreement
• The contract conflicts with state licensing or subsidy rules

For licensing or safety concerns, the state child care agency may be the appropriate first contact. For suspected abuse, neglect, or immediate danger, contact the proper child protection or emergency authority.

Frequently Asked Questions

Related Resources

• How to Choose Child Care: A Parent’s Complete Guide
• Questions to Ask When Interviewing a Daycare Provider
• Signs of a Good or Bad Childcare Center
• Signs of a Good or Bad Home Daycare
• Preparing Your Child With Additional Needs for a New Childcare Provider
• What Parents Should Look for in Special Needs Childcare Providers
• Is Your Childcare Provider Safe? 3 Signs Your Kids Are in Danger

Sources

• ChildCare.gov: Your Responsibilities Once You Find Care
• ChildCare.gov: How Do I Find and Choose Quality Child Care?
• ChildCare.gov: What Is Child Care Licensing?
• ChildCare.gov: Preventing Expulsions and Suspensions in Child Care
• ChildCare.gov: Child Care Financial Assistance Options
• Consumer Financial Protection Bureau: Automatic Debit Payments

ChildCareCenter.us is an independent directory and educational resource. Child care, consumer, contract, disability, and payment laws vary by state and may change. This article provides general educational information and is not legal advice. Verify licensing and policy information with the responsible state or territory agency and consult a qualified local attorney about specific contract disputes.