On June 6, the Supreme People's Court (SPC) drafted and released the Interpretation on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Disputes over Prepaid Consumption (Draft for Comment) (the "Draft") for public comments, which has come to an end by now.

The Draft addresses disputes arising from prepaid consumption scenarios across various sectors of daily life, including retail, accommodation, catering, fitness, transportation, hairdressing, beauty, education, and training.it specially targets cases where service providers collect advance payments from consumers for goods or services to be delivered or provided multiple times or on an ongoing basis. Key provisions of the Draft include: 1) Clarification of several types of invalid "imparity clause" in prepaid consumption contracts; 2) Measures to combat issues such as "absconding with funds" and "deceptive marketing practices"; 3) Establishment of a seven-day cooling-off period during which consumers can request a refund without stating a reason after making a prepayment; 4) Safeguards for legitimate prepaid consumption business models. Notably, the Draft stipulates that if an individual lacking capacity for civil conduct enters into a prepaid consumption contract and makes a prepayment, their legal representative may request the court to declare the contract invalid and order the service provider to return the prepayment. The court is directed to support such requests.

(Source: Supreme People's Court)