11/6/18 Top Ten Tips in Drafting and Negotiating Contract
Today and in the coming E-Legal Lessons, we’ll include the Top Ten Tips in Drafting and Negotiating International Contracts as suggested by Ken Adams.
Contracts for international transactions contain a mix of the familiar and the exotic. Familiar, in that deals resemble each other the world over, and so does the language used to express them. Exotic, in that differences in legal and business environments can require different approaches, or at least make them advisable. If you ignore the familiar, you end up reinventing the wheel. If you ignore the exotic, you might be in for unpleasant surprises.
Here are some suggestions for navigating international transactions.
1. The Language of the Contract
English is the lingua franca of international business, so it’s commonplace for parties from different countries to enter into contracts in English, even if neither party is from an English-speaking country. And international companies generally find it simpler to have all their contracts be in English instead of a mix of languages.
But if a contract party and its lawyers aren’t used to working in English, the benefit of prevailing on them to accept English-language contracts might be more than offset by problems after signing caused by their not understanding what they had agreed to. For example, Chinese courts have been willing to hold that a given contract not in Chinese is void because the Chinese party simply didn’t understand it.
And in 2013, an lndonesian district court held that contracts entered into with Indonesian entities after 9 July 2009 that are not in the Indonesian language, Bahasa Indonesia, are void under a 2009 law.
If using just English raises concerns, have the parties waive the right to claim the contract is invalid because it’s in English, or enter into dual-language contracts, with English as the governing language, or do both.
And I personally would add: get the help of a professional translation company – like ours!