## Facts

- The Barrie School, a private nonprofit Montessori school in Maryland, re-enrolled the Patches’ child for the 2004–2005 academic year under a written re-enrollment agreement.
- The agreement required a $1,000 nonrefundable deposit and payment of the remaining $13,490 tuition in installments.
- The agreement allowed unilateral cancellation without liability only if the head of school received written notice by certified letter before May 31, 2004.
- The agreement stated that if the child was not withdrawn by timely certified-letter notice, the parents were liable for the entire year’s charges, and that withdrawal, dismissal, absences, or illness would not reduce that obligation.
- The Patches did not cancel by May 31, 2004; on July 14, 2004, they sent a cancellation notice by fax, demanded return of the deposit, refused to pay remaining tuition, and enrolled the child elsewhere.
- The school sued for breach, seeking the remaining tuition as liquidated damages, interest, and attorney’s fees; the Patches counterclaimed for return of the deposit and asserted defenses including fraud, adhesion/unconscionability, penalty, public policy, and failure to mitigate.
- Trial evidence showed the school’s overall enrollment exceeded projections, but there was no direct evidence the school sought a replacement student for the child’s spot.

## Issues

1. Whether a non-breaching party must mitigate damages when the contract contains a valid liquidated-damages clause.
2. Whether the re-enrollment agreement was a contract of adhesion or unconscionable.

## Decision

- The Court of Appeals of Maryland held that when parties agree to a valid liquidated-damages sum, the non-breaching party has no duty to mitigate after breach.
- The court upheld the agreement as neither a contract of adhesion nor unconscionable, emphasizing the clear withdrawal deadline and opportunity to avoid liability by timely notice.
- The court reversed the lower courts’ mitigation-based rulings and remanded for entry of judgment consistent with the enforceable liquidated-damages provision (entitling the school to the stipulated amount).

## Legal Principles

- A valid liquidated-damages clause (i.e., a reasonable pre-estimate and not a penalty) fixes the recoverable amount and displaces post-breach litigation over actual damages.
- Because liquidated damages are set at contract formation, the usual mitigation doctrine applicable to expectation damages does not apply once a liquidated-damages clause is found valid.
- An agreement for private-school enrollment is not adhesive or unconscionable where the family voluntarily contracts and has a defined, meaningful opportunity to withdraw without penalty before a stated deadline.

## Conclusion

The court enforced the school’s liquidated-damages remedy for late withdrawal and held that a valid liquidated-damages clause eliminates any duty to mitigate, while also rejecting claims that the re-enrollment agreement was adhesive or unconscionable.


Barrie Sch. v. Patch, 401 Md. 497, 933 A.2d 382 (Md. 2007)