I'm with Dreamalittledream too. Since they just started care even if they did read the contract and handbook it probably hasn't sunk in exactly what some of it meant - now they know. Going forward I would make it clear that there are no more second chances and that in fairness to the others in care you need to enforce the rules in the book. Ask them to please read the book and if they have any questions to ask them now.

If they are as perfect for the daycare as you say then worth keeping. We all make mistakes and sometimes being forgiving is better than enforcing the contract to the letter.