Case Summary: The plaintiff, Mr. Liu, requested the court to confirm that the arbitration clause was not valid on the ground that the standard clause was not called attention in a reasonable manner. The court held that the dispute resolution clause, as the main clause of the contract, should be a clause of material interest to the parties, and the defendant, an education company, as the party who provided the Course Service Contract in the case, should perform the aforementioned obligation of calling attention or giving explanations to the contractual counterparty, the plaintiff, and that the arbitration clause in the Contract had not been called into the attention of the counterparty by bolding fonts or other reasonable means, resulting in the plaintiff’s failure to pay attention to or understand the clause. During the examination of the case, the education company recognized that it had not fulfilled its duty to inform. Therefore, the court confirmed that the arbitration clause was invalid. (Case No.1220/(2023) Beijing 04 Civil Special)

Case Comment: The contract provider has the obligation to calling attention or giving explanations to the counterparty, and if he or she failed to do so, the standard clause will not be a part of the contract. It’s clear that the obligation to prompt and explain the clause is premised on it belongs to a standard clause. What’s the composition of the standard clause? The court in this case pointed out that “the standard clauses should have three characteristics at the same time: first, they are prepared in advance; second, they are used repeatedly; and third, they are not negotiated between the parties”. As for the consequences of failing to fulfill the duty of reminder and explanation, Article 496(2) of the Civil Code provides that “where the party providing the standard clause fails to perform the aforementioned ibligation of calling attention or giving explanations, thus resulting in the other party’s failure to pay attention to or understand the clause concerning his major interests and concerns, the other party may claim that such clause does not become part of the contract”.

(Source: Wechat Account of the Ad Hoc Arbitration)