Training institutions abscond with money, what should students do if they want a refund?

Compiled from: Xiamen Huli District Court
 
Case review
In October 2018, Alin signed a "Student Enrollment Contract" and "Student Registration Form" with Xiamen Webi English (later renamed "Xiamen Global Western Language Education") Huli Training Center, agreeing on a tuition fee of 37,000 yuan, with a study period from October 30, 2018 to October 30, 2020. Subsequently, Alin transferred 3,500 yuan and paid 33,000 yuan through a loan platform, totaling 36,500 yuan. After the contract was signed, Alin attended classes at the Huli Training Center. On March 9, 2020, the Huli Training Center publicly announced the cessation of all operations and course services at the Xiamen campus.

 
 

Arlene believed that her remaining courses had not been completed and that the Huli Training Center had effectively ceased operations, making the purpose of the training contract unattainable and constituting a fundamental breach, so she filed a lawsuit with the court.
 
The court found after trial that Arlene had paid training fees of 36,500 yuan. Since the Huli Training Center had closed and had not yet resumed classes, indicating it would no longer fulfill its main contractual obligations, Arlene's request to terminate the education and training contract between her and the Huli Training Center was well-founded and supported.
 
Arlene admitted that the course progress was 33%. The Huli Training Center did not submit evidence proving it had provided Arlene with the remaining course training. The court legally supported the Huli Training Center refunding 24,455 yuan (36,500 yuan × 67%) for the untrained courses.
 
 
《 Civil Code 》   [6] Article 566 之一  
After the contract is terminated, obligations not yet performed shall cease; for those already performed, based on the performance and the nature of the contract, the parties may request restoration to the original state or other remedial measures, and have the right to claim compensation for losses.

 

 
[1] The author's perspective
This year, the state newly issued the "double reduction" policy, coupled with the impact of the COVID-19 pandemic since last year, and some training institutions also face issues like poor management and broken capital chains. Thus, recently, more and more training institutions have gone bankrupt or absconded with funds, leaving those who prepaid training fees with no recourse and even facing the inability to get refunds.
 
In fact, the difficulty of refunds lies not in the contract content itself, but in the training institution having already vacated its premises. Even if the court rules in favor of the student, enforcement is very difficult. Therefore, when choosing a training institution, students should pay attention to whether the institution shows any anomalies (such as large-scale store closures). When signing a contract, students should require the training institution to sign a standardized written contract, verify the contracting party clearly before signing, fully understand the agreement content, such as contract duration, refund conditions, breach clauses, and other specifics, and request formal invoices or receipts for prepaid training fees. On the other hand, they should keep the original contract and payment vouchers safe, so that in cases of institutional breach, they can effectively protect their rights through litigation or other means in a timely manner.