If your business manages contracts in California, you should be aware of legal changes that increased the requirements for language translations. On September 25, 2020, Governor Newsome signed bill AB 3254, a law that expands the translation requirements for consumer contracts negotiated in a language other than English.
Translation legislation such as AB 3254 is intended to protect consumers from unfair, deceptive, or abusive practices. This particular law provides that the parties’ “rights and obligations” under a contract are to be determined by the English version of the agreement, and the translation is intended “to show that no contract was entered into because of a substantial difference in the material terms and conditions of the contract and the translation.” In other words, an accurate translation of the legal agreement ensures that all parties are fully aware of all terms of the agreement before commitment.
Prior to AB 3254, California Civil Code 1632 outlined translation requirements for “any person engaged in a trade or business which negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean.” 3.5 million Californians who speak little or no English do speak one of these five languages.
Likewise, California Civil Code 1632.5 applies more specifically to “a bank, savings association, as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Division 7 [the ‘Industrial Loan Law’], Division 9 [the ‘California Finance Law’], or Division 20 [the ‘California Mortgage Loan Act’] of the Financial Code.”
These codes require the consumer subject to the contract to be provided an accurate translation of the documents and disclosures. Types of arrangements included in the requirements are:
- Auto sales and leases,
- Apartment leases and rental agreements,
- Mortgages,
- Legal services agreements, and
- Any loans and other extensions of credit intended for personal, family, or household purposes.
AB 3254 carries forth those requirements over the same types of contracts. Still, it extends the definition of parties who must receive a translation to non-party signatories like guarantors and co-signors. There is an exemption for specific agreements negotiated with a qualified interpreter of the consumer’s choosing.
There is currently some discussion about the actual impact of the legislation. While the California Senate’s analysis concluded AB 3254 only “expands the translation requirement….to any person signing the contract, not just the parties to the contract,” others feel legal consequences for missing or inadequate translations are unclear. For example, the new law requires that failure to provide the required translation grants the right to rescind the contract to “the person aggrieved” but fails to define who “the person aggrieved” includes. Due to the gap, it may extend to the non-party signatories.
When you need translation services for contracts, contact The Perfect Translation.
Whether you need translation services to help with one project or an ongoing book of work, we have the right professional translators to handle the job. The Perfect Translation goes beyond language proficiency to provide expertise in various industries, including immigration, business, real estate, financial, academic, legal, and medical. We understand the legal requirements for contracts in each state, such as AB 3254 in California. Contact us today for a free quote!
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