In a global economy, it’s hard to expand your business without eventually developing overseas connections – and that means international contracts.
Unfortunately, any international contract presents unique problems that domestic contracts do not. In particular, you may run into problems simply due to the fact that your contracts may need to be written in more than one language.
Why is the use of multiple languages a problem?
In essence, it comes down to this: The mere act of translation will subtly change the wording of a contract, no matter how skilled the translator may be.
That can lead to confusion down the line when you have one contract in English and another in Chinese, Japanese or Russian. If there’s a disagreement about the meaning of a contract, the question becomes, “Which contract, in which language, is the official version?”
How can a choice of language clause help?
A choice of language clause can eliminate a lot of hassles when there is a conflict between the parties by specifically designating which version of the contract – the one in English or the one in another language – controls the situation.
In many cases, it’s preferable to designate the English-language contract as the controlling document in these cases (since that’s most likely the only common tongue between the parties), but not always. Chinese courts, for example, have sometimes held that English-language contracts are invalid in that country.
Because of the complicated nature of international contracts, you don’t want to risk a misunderstanding that could come back to haunt you. Make sure that you have experienced legal guidance that knows the nuances of international contract law.