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Case:A student was expelled in the middle of the year from a yeshiva for not living up to the minimum expectations of its staff. The yeshiva demands full tuition because of a clause in the contract stating that if the student leaves the yeshiva after a certain date, he must pay in full. The sides disagree as to whether this condition applies to a student who was expelled.
Ruling: [Last time we saw that the contract’s context implies that the parents do not need to pay in full, but that since they already paid, it is difficult to extract a refund based on this implication alone.]
Tuition is compensation for one providing education, and if the service was not provided, it would seem that tuition is not due from parents who are not responsible for their son’s behavior. We must look at sources relating to services that were discontinued due to an oness (extenuating circumstance). The gemara (Bava Metzia 78b-79a) discusses such cases including one who was hired to irrigate, which became unnecessary due to rain. If the two sides were equally aware or unaware of the chance of such a scenario, the worker does not get paid.
The gemara also discusses one who rented a ship for cargo and the ship sank. The halacha is that the renter does not have to pay the rental fee, but if he did, he does not get a refund. There are two approaches to the logic of this distinction. Tosafot says that early payment is a sign of relinquishing one’s rights in a case like this. The Rosh (Bava Metzia 6:3) says that in many such cases, it is not clear which side is correct, and so we revert to the broad rule of having the person with possession win.
In a parallel case, where someone rented a house and died during the lease period, the Rashba (I:1028) says that the inheritors must continue paying because a renter acquires rights and obligations of the house. The Maharam MiRutneberg disagrees. The Rama (CM 334:1) cites both opinions and rules that they do not pay, but if the rent was paid, they do not get a refund. The Gra (334:5) applies the Rama’s distinction only to renting a house, due to the opinion that the house is acquired, but regarding a worker whose work was discontinued, the money is returned even if it was paid. The S’ma (334:3) says that the Rama’s distinction applies even to a worker.
In this case, according to the minority opinion of beit din, since it is unclear whether the yeshiva deserves money for the period they did not teach the student, they do not have to return the tuition. According to the majority opinion, though, the yeshiva has to return the additional tuition for two reasons: 1. There is a strong assumption that parents would not agree to pay under such circumstances. 2. The yeshiva was not compelled to expel the student but decided (legitimately) that it was not in their best interests. They cannot make that decision and refuse to refund the money. Only if the student’s behavior left no choice would it make sense to allow them to keep the full tuition.
P'ninat Mishpat (829)
Various Rabbis
247 - Returning Tuition When a Student Was Expelled – part I
248 - Returning Tuition When a Student Was Expelled – part II
249 - Who Should Discuss With Whom?
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Various Rabbis
Various Rabbis including those of of Yeshivat Bet El, such as Rabbi Chaim Katz, Rabbi Binyamin Bamberger and Rabbi Yitzchak Greenblat and others.

Moreshet Shaul Moreshet Shaul: A Crown and its Scepter – part II
Based on Siach Shaul, Pirkei Machshava V’Hadracha p. 294-5

P'ninat Mishpat P'ninat Mishpat: Return of Down Payment Due to War – part I
based on ruling 84044 of the Eretz Hemdah-Gazit Rabbinical Courts

P'ninat Mishpat P'ninat Mishpat: Multiple Agreements and Parties – part III
based on appeal of ruling 80082 of the Eretz Hemdah-Gazit Rabbinical Courts

P'ninat Mishpat P'ninat Mishpat: Smoking Rights in a Rental? – part I
based on ruling 85076 of the Eretz Hemdah-Gazit Rabbinical Courts
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