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Five common issues in bilingual contract drafting (German/English)

As a follow up to my article on whether it is okay to issue English language contracts in Austria, I felt like sharing some common issues that I have encountered in bilingual contracts, especially when written by German native speakers. I use this as a check list in my own contract drafting process to make sure I avoid these pitfalls.

So here it goes:

  1. Sloppy translation of specific terms

    Law is an exact discipline. If you try to translate very specific legal terms from one language to the other, be very careful. A sloppy translation could change the intended meaning completely. In order to avoid this, I propose the following, should you struggle to find an exact translation: Use a translation that comes as closely to the original term and add the original language word in brackets. This will definitely help when interpreting your contract.

    Example:
    (Original German language version term:) Gewerberechtlicher Geschäftsführer – (English version in translation:) Managing Director according to trade law (“Gewerberechtlicher Geschäftsführer” )

     

  2. Clash of language versions

    It is vital to clarify which language version shall prevail in case of differences in the different versions. Just imagine one party clinging to the meaning in the German language version, while the other is relying on a (maybe slightly different) meaning according to the English language version. A common solution would be an explicit clarification which language version shall govern, while the other is meant for translation purposes only.

    Example of such a clarification with German being the dominant language: (German language version:) „Nur der deutsche Vertragstext ist bindend, die englische Übersetzung dient ausschließlich zu Informationszwecken“ / (English language version:) “Only the German version of this contract shall be legally binding, the English translation serves information purposes only.”

     

  3. Beware of digits and amounts

    The use of commas and points when indicating amounts is different between German and English. If you mix them up, you can unintentionally make somebody very happy and somebody else very annoyed.

    Example: one hundred thousand Euro would be written EUR 100.000,00 in German vs EUR 100,000.00 in English.

    Another common way to avoid ambiguities in contracts would be to put the amount in words after the digits, such asin this example (now only referring to the English language version):

    EUR 250,000.00 (in words: two hundred fifty thousand EUR).

     

  4. Indicating a requirement or obligation by one or all parties to do sth.

Where German language contracts would say something along the lines of “Partei A ist
verpflichtet, XYZ zu tun.
” the translation can be a little tricky. While the use of “oblige” or “obligate” (as in “Party A is obliged/obligated to do XYZ”) may miss the mark depending on where in the English speaking world you are based, there seems to be consensus about using “shall” in contracts (example “Party A shall do XYZ”) to be a good option.

5. Which law shall rule them all?

When you have a bilingual contract, maybe even with contract parties based in different countries, confusion may arise about the laws of which country will govern the entire agreement. You definitely want to avoid a situation where either party claims applicability of their laws because it is more favorable or simply more familiar to them. A clause clarifying the situation will go a long way to avoid this potentially nerve-wrecking situation.

Example: “(German language version:) Dieser Vertrag unterliegt österreichischem Recht / (English language version:) This Agreement is governed by and construed in accordance with the laws of Austria.”

There are of course a plethora of other issues that could be addressed here. Can you think of any? I look forward to your comments.