It sounds like your daughter is finding herself in a tough situation: of course she wants to protect her son from being teased and taunted but she also doesn’t want to jeopardize the relationship she has with her friend.

It might be a good idea for your daughter and her friend to sit down and have an honest discussion about the expectations they have for their children. Even if your daughter and her friend have a different overall set of expectations for their children, they may be able to agree on some expectations they both have for their children when they play together. Together, your daughter and friend may be able to set up some ground rules for their children and agreed-upon ways to praise the children for good behavior and acceptable punishments (e.g., time-out) for negative behaviors. It would be important for both your daughter and her friend to describe the ‘play rules’ they decide upon to their children. Children generally respond best to a small number of rules, such as 3-5, that are phrased positively, stating exactly what the children are to do (i.e., “Speak quietly” as opposed to “Don’t yell”).  They should also clearly state the consequences their children will face if they fail to follow these rules. For more ideas, see the following article on effective discipline: http://www.education.com/reference/article/Ref_Effective_Discipline/

I realize that it may be easier said than done to have this conversation and to come up with rules and consequences that are acceptable for both your daughter and her friend, especially if your daughter’s friend doesn’t see any behavior problems. If there is a way to quietly watch the children at play when they don’t realize they are being watched, this can be a powerful way to see exactly what sorts of behaviors the children are exhibiting, both positive and negative. In any case, your daughter should be honest and open about her concerns, while taking care to present them in a way that does not single out or attack her friend’s child, such as by saying “I’m worried that our kids aren’t behaving as well as they should” or stating that she’s worried her son’s feelings are hurt when he is teased. A good friend should be able to understand where your daughter is coming from in terms of being concerned for her child.