Barrie School v. Patch

Facts

Ds enrolled their daughter, Christiana, in P School for the 2004-2005 academic year. The agreement contained a specific deadline for canceling. If Ds withdrew their child from P after a specific date, Ds would pay tuition for the entire academic year as liquidated damages. Ds paid a $1,000.00 non-refundable deposit and were to pay off the remaining tuition balance of $13,490.00 in two installments. Ds could unilaterally cancel, provided that the head of the school received written notice by certified letter before May 31, 2004. Ds were obligated to pay the full tuition if they failed to meet the May 31, 2004 deadline for withdrawal. On July 14, 2004, forty-four days after the withdrawal deadline, D's sent a cancellation notice via facsimile to P and demanded a refund of their initial deposit. D refused to pay any of the remaining tuition balance to the school and enrolled Christiana in another school. P filed a breach of contract action. The District Court found that there was a valid contract between the parties, including a valid liquidated damages clause, that there was no fraud in the inducement to enter into the Agreement, and that the Agreement was not a contract of adhesion. Accordingly, the court denied Ds' counterclaim. The court held the liquidated damages clause to be valid but then held P's failure to mitigate damages was fatal to its claim. It held that P in the face of a breach does have some duty to mitigate. Even if the amount is difficult to determine, they still had a duty to do something to mitigate. P did absolutely nothing whatsoever to try to fill the space for this child once they got the word in July that she was not going to be there. P appealed, and the Circuit Court agreed with the District Court and held that even though the liquidated damages clause was valid and not a penalty, P had a duty to mitigate damages. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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