A growing global economy has opened the door for more international business deals than ever before. As a result, small and large companies alike routinely work with businesses abroad. Unfortunately, this work commonly requires agreements between parties that do not speak the same language and forces the question about which language should be used in drafting an international contract. Not only is an accurate translation a necessity, but you may also need to rely on the translated version as the sole contract.
Why not produce two contracts…one in each language?
Many businesses attempt to solve this dilemma by producing two contracts, typically with one of two clauses:
- “This agreement has been prepared in [language A], and the [language A] version hereof shall prevail and be binding even though a [language B] translation may also be prepared.”
- “This agreement has been prepared in both [language A and language B]. In the event of any inconsistency, the [language A] version shall apply and be binding upon the parties.”
The issue with these types of clauses is that, in reality, a court of law may not side with them. Here’s why.
In which country will discrepancies be decided?
In an international business deal, it’s essential to consider who would decide disputes should they come to light. For example, does the contract include a clause for dispute resolution? Does the agreement define jurisdiction? Where are the physical locations of the foreign party?
Even if an international contract indicates the English language version should prevail, and disputes are to be handled in a U.S. court of law, it may not be feasible to do so. For example, if the foreign country resides solely in the other nation and all of its assets are within that country’s borders, the only way to achieve injunctive relief and damages may be to pursue the dispute in the foreign country’s court of law.
Depending on the prevalence of the English language in the other country, individuals participating in the proceedings might speak little or no English. As a result, they will rely on the translated version of the contract and evidentiary documents in deciding the case–regardless of the prevailing language clause. Additionally, if there are clauses that either do not make sense or are at odds with foreign law, they may be disregarded by officials.
Multiple contracts create confusion.
Providing two versions of a contract with a clause indicating the English version should prevail is meant to eliminate ambiguity and create a definition in the event of an error in translation. However, in reality, they can lead to confusion and frustration, especially when a foreign court of law will only read the version in its native language regardless.
Instead, it’s best to have one well-constructed version of the contract in the language spoken by officials in the country where disputes will be handled. Business leaders should invest the time and money to have contracts translated by attorneys who understand the contract matter well, are fluent in both languages, understand the legal system of the target language, and who can discuss nuances with the parties to the contract to ensure the correct phrases, terms, and descriptions are included.
Translators can provide English-speaking business managers with unofficial translated versions to serve solely as operational guides and reference materials as needed.
When You’re Negotiating an International Contract with a Foreign Entity, Start with The Perfect Translation.
The Perfect Translation was founded by legal professionals who understand the critical nature of accurate translations for foreign contracts. Our team includes attorneys who are fluent in other languages and have a deep understanding of and experience in foreign laws. When you hire The Perfect Translation, we will connect you with the right translator to handle your specific content so you can rest assured your documents will be accurate. Contact us today to get a free quote.