Handbooks & Handshakes: N.C. Court Finds Student Handbook Not a Contract

A North Carolina federal district court recently addressed one of the long-standing questions colleges and universities face: Does a student handbook create a contract that binds the school? Based on the particular facts before it, the court in Shaw v. Elon University, No. 1:18CV557 (M.D.N.C. July 18, 2019), reaffirmed the principle that a student handbook generally does not constitute an enforceable contract.

In Shaw, a student sued Elon University for allegedly failing to follow its formal conduct procedures during his disciplinary proceedings. Specifically, the student claimed that the University failed to follow the "timeline that it established for investigating and adjudicating student conduct matters, considering all relevant and credible evidence, applying its procedures consistently, and adhering to its [tenet] of fairness to all." Id. at 7.

The court agreed with the University's position that, under North Carolina law, "the policies, procedures, alleged obligations, and tenets outlined in" the University's handbook did not create an enforceable contract. In reaching this conclusion, the court reaffirmed the holdings of numerous state and federal courts in North Carolina, which "have found that university handbooks, bulletins, guidelines, codes of conduct, manuals, and the like are not independently enforceable contracts." Id. at 10-11. 

In support of its conclusion, the Shaw court cited a number of characteristics that made Elon University's handbook different from a contract:

• The provisions and procedures set forth in the handbook were "unilateral and aspirational undertakings by" the University, not specific or definite obligations that the University undertook, and did not "evince [a] manifestation of an intent to be bound";
• The handbook's language did not establish any "firm and definite timeline or terms," but instead was designed to allow the University to apply its policies and procedures flexibly and on a case-by-case basis;
• The student did not sign the handbook or otherwise indicate assent to be bound by its terms;
• The handbook was not incorporated into any other agreement made binding on the student; and
• The handbook's terms could be unilaterally modified at any time by the University, without the student's knowledge or consent.

As with any court decision, the facts matter. Indeed, several other recent North Carolina cases have reached a different result, allowing breach of contract claims to proceed based on educational institutions' alleged violations of their student handbooks. Id. at 15-16.^[1]  In declining to adopt the reasoning in those cases, the Shaw court emphasized that the cases "did not address or explain how [the other courts] concluded that a contractual provision was formed, when it was formed, how it bound the parties, or whether consideration existed." Id. at 17.

Accordingly, although Shaw reaffirms the general rule in North Carolina that student handbooks, codes of conduct and similar documents typically are not binding contracts when standing alone, educational institutions should keep in mind that this rule is dependent upon the facts and circumstances—most particularly, the language of the handbook and whether it is agreed to by students.

For more information on student handbooks and related litigation, please contact a member of Robinson Bradshaw's Education Practice Group.

[1] McFadyen v. Duke Univ., 786 F. Supp. 2d 887, 983 (M.D.N.C. 2011), aff’d in part, rev’d in part, dismissed in part sub nom.; Myers v. Bradford Preparatory Sch., Civ. Action No. 3:17-CV-099-RJC-DCK, 2017 WL 6820203 (W.D.N.C. Oct. 19, 2017); and Neal v. Univ. of N.C., No. 5:17-CV-00186-BR, 2018 WL 2027730, at *7 (E.D.N.C. May 1, 2018).