Discouraged and Disgusted

[Cat Herder]

Well, can't blame the kid. I'd lie too if my parents taught me that was how to get what I wanted.

The problem is the Mom who rewarded him for it AND purposely sought attention for herself from you (and whomever else she is telling this story to).

Lot's of triangulating going on in that family. I'd go with a blanket term. Fewer details give her fewer avenues for drama supply.

[daycare]

I would term immediately.

Dear Parent,
As of today, 11/14/2013 I will be unable to provide daycare services.
Sincerely,
Your Provider

I would not put anything in writing about the child's lying.

this....

I would be certain to follow it up with a written a letter. This way it will not turn into a tit for tat game.

It happened to a provider friend of mine, she termed a family and then the next day they showed up as if they didnt know they were termed. After she told me that, I always make certain that anything that I talk about verbally, that I always follow it up in some way with a written document.