Translation Issues in Cross-Border Contract Law: Which Foreign Language to Use?

Foreign language translation issues aside, when entering into a cross-border or international contractual agreement, one common issue that arises is deciding which language the contract should be drafted in. Although a common answer is to use the language of the country in which the contract will be filed in and include a foreign language translation in the language of all other parties involved, this is not always the case.

Take, for example, the important international law decision of Germany 8 February 1995 Appellate Court Hamm, popularly referred to as the Socks Case. This case involved a German buyer ordering socks from an Italian seller. Four contracts were involved, each being conducted in Italian, with the German buyer using a foreign language translation. Further, the Italian Seller assigned its payment claims to an Italian bank and gave notice of the assignment to the German Buyer. The notice was written in French and contained an English language translation.

In its decision, the court held that in cross-border contracts the parties have the option of using either the language agreed upon or, if none are agreed upon, the language customarily practiced between them. If neither exists, the court will look at the circumstances of the case to decide which language should be recognized. In the case at hand, the court found that neither an agreed upon language, nor a customarily practiced language existed.

Thus, turning towards the facts of the case, the court found that the Buyer should have recognized that the assignment notice could have some legal relevance and, thus, it was up to the Buyer to obtain a foreign language translation of its contents.

To read our legal translation blog entry “Cross-Border Litigation Increases the Need for Professional Foreign Language Legal Translation Services”, click here.

To read “Professional Document Translation and Defining Punitive Damages in the EU”, click here.

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by Legal Translator & Court Interpreter

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