May the force majeure be with you...

As winter approaches, the possibility of school closure arises. And parents, particularly those most hard-pressed, will check the details of your terms and conditions to see if they are due a refund, writes John Deakin

School closures, due to an event beyond the control of the parties (the school and the parents) could bring the legal doctrine of frustration into operation. If parents were to claim that the school is unable to perform the obligations they have bargained for they may be able to seek a refund of fees or to treat themselves as discharged from the contract, enabling them to move their children elsewhere without notice or payment of fees in lieu of notice.

To reduce the risk of having to make wholesale refunds or reopening an empty school, schools should consider taking the following steps:
• ensure the terms and conditions of the parent contract contain clear and comprehensive force majeure provisions;
• include detailed procedures for dealing with force majeure events within published policies and procedures; and
• check the adequacy and scope of existing insurance cover and consider appropriate extensions to cover for such things as losses arising from business interruption.

An event beyond the control of the parties which prevents one party from fulfilling its obligations under the contract may be a force majeure event if expressly stated as such in the contract. The effect of a force majeure event is to allow the affected party to suspend itself from its obligations to perform the contract ie to provide educational services or to pay fees.

T&Cs
The contract for educational services is a consumer contract, the terms and conditions of which are, in most cases, non-negotiable. Consequently, both the Courts and the regulator, the Office of Fair Trading, are reluctant to hold them to be fair and reasonable unless very carefully drafted and operated. The clauses will need to provide parity of obligations and responsibilities between the school and parents if they are to be deemed fair, although in reality there are limited circumstances in which a parent may claim a genuine force majeure event.

For the clauses to be relied on, thought needs to be given to the specific events considered by the parties to be beyond their control. These may include fire, storms, Acts of God, extreme and unforeseen weather conditions, failure of utilities or public transportation or outbreak of infectious or contagious disease. Industrial disputes, strikes or lock-outs should also be considered, but schools should bear in mind that the courts will look at whether or not such action is really beyond the control of the party claiming it to be a force majeure event.

Take notice
Force majeure clauses require the party suffering a force majeure event to provide notice of that event to the other. The clauses should also indicate how long the event may continue before the other party may exercise the right to terminate the contract. Too long a period of time, perhaps with the potential to continue across part or all of three academic terms, may be deemed unreasonable and therefore unenforceable.

As a number of schools will be aware, parents have not been slow in requesting a refund of fees pro-rated to the period of time the educational service is suspended. To reduce the risk of successful claims, the school's terms and conditions should also include a clause stating the circumstances in which fees will be refunded or waived.
In addition, it is important that the school's policies and procedures for dealing with force majeure events can demonstrate the school will employ reasonable endeavours to continue to deliver the educational services where possible. Alongside this, it is worthwhile including a clause in the terms and conditions reserving the right to the head to alter the way the curriculum is delivered, where appropriate.

Keep on running
To demonstrate that reasonable endeavours have been used to keep the school running during a force majeure event, schools should consider putting in place a form of incident management policy. The policy, best reviewed annually, or shortly after an event, should include such matters as:
• the formation and composition of an emergency action team to oversee events;
• how notice is to be given and by whom;
• the use and form of communication systems, such as parent portals or cascade systems;
• how lessons may be conducted off site or remotely online;
• how the school will access alternative power supplies, accommodation for boarders or temporary classrooms and IT systems; and
• who will co-ordinate communications with parents or the media.

An example of good practice was seen during the most recent outbreak of swine flu. Within 24 hours of the Health Protection Agency recommending closure, a particular school's emergency committee of the senior leadership team and governors had met and notified parents through a dedicated email portal, organised the transportation of all pupils to their homes or education guardians, activated online teaching sessions, with the pupils having direct email access to their tutors, and issued a statement to local and national press. The consequence of the investment in thorough pre-planning and in comprehensive force majeure and refund and waiver provisions in its terms and conditions was the minimal disruption to the education of the pupils during the week of closure. Thereafter, the school was able to rebuff requests by parents for a discount on the next term's fees equivalent to the period of closure.
Continued planning and review of procedures coupled with comprehensive terms and conditions will help to ensure that the force majeure is with you.

John Deakin is a partner at Veale Wasbrough Vizards. John can be contacted on 0117 314 5335 or jdeakin@vwv.co.uk. 

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