Termination of a private education contract during the semester

Question from an SSPM member:

I organize my teaching on a semester basis. So it's important to me that students don't drop out during the semester. Can I ensure that there are no unforeseen cancellations by means of a penalty agreement?

Response from Yvette Kovacs:

1. We refer you first to the publication Examples from the practice of the legal counsel of the Swiss Society for Music Pedagogy SSPMcase no. 17, where the principles governing the termination of a private education contract are set out in detail.

2. In the meantime, the Swiss Federal Supreme Court has handed down several new rulings relating to private teaching contracts. These expressly confirm that such contracts can be terminated at any time and without cause by either the teacher or the student. However, it is also made clear that termination during the course of a semester is considered to be untimely, and that fees for the current semester remain payable. This means that, once the contract has been terminated, fees must continue to be paid until the end of the semester, irrespective of the number of lessons actually attended, and that teaching fees already paid for the semester are not to be reimbursed.

3. From a legal point of view, this is a contractual penalty. It follows that the professor does not need to provide case-by-case proof of the damage caused by the untimely termination, and that he can demand lump-sum payment of the total fees due for the semester, irrespective of the concrete damage he has suffered. This presupposes, of course, that he cannot be accused of having provided a valid reason for terminating the contract, and that he has suffered damage in view of the timing of the termination and the arrangements he had made. In the case of a teaching contract, the Swiss Federal Supreme Court has ruled that, as a general rule, termination in the middle of a semester constitutes untimely termination. According to the new case law, this principle also applies when the termination is made before the start of the new semester, but after the expiry of the jointly agreed termination or enrolment deadline.

4. The inherently unfavorable legal situation resulting from the possibility of termination at any time remains, but its financial consequences are thus greatly attenuated. I therefore recommend that this case law be expressly incorporated into the private education contract, for example as follows:

Contracts for private teaching based on fees for individual lessons or flat-rate fees should be adapted to include the following provision:

This contract may be terminated by either party at the beginning of each semester, subject to a one-month notice period. During the semester, it may be terminated by mutual agreement for special reasons. If the contract is terminated unilaterally without observing the contractual terms and deadlines, and not as a result of a breach of duty on the part of the teacher, it is considered to be an untimely termination. The half-yearly lump-sum fee remains payable in full, irrespective of the number of lessons not attended or the termination of the contract.

5. The model contracts listed in the downloads section of the SSPM website and in the Music Agenda will also be adapted to this new case law as soon as possible, and will thus become considerably more favorable to private teachers.

6. To ensure that this new legal situation is communicated transparently, I recommend discussing this contractual change with private pupils at an early stage and having them sign the new contract as soon as possible. It is important to emphasize that in the case of the contract for individual lessons, this provision does not introduce a change, but expressly indicates the current legal situation. On the other hand, a change is effectively made to the contract based on flat-rate fees, so that in the event of the student's disagreement, the introduction of this change requires the old contract to be terminated and a new one concluded for the next semester.