Common Pitfalls in Bilingual Chinese-English Contracts
Bilingual Chinese-English contracts are widely used in cross-border transactions. Handled poorly, however, small differences between the two versions can trigger disputes.
Common pitfalls
- Conflicting versions: The Chinese and English terms are inconsistent, and no version is stated to prevail.
- Translation drift: Legal terms such as “liquidated damages” or “force majeure” may carry different meanings in the two languages.
- Unclear governing law and jurisdiction: The contract fails to state which law applies and which court or arbitral institution will resolve disputes.
How to avoid them
- State clearly that one language version prevails, or treat both as equally binding with a uniform interpretation.
- Define key terms and keep them consistent throughout.
- Always include a dispute-resolution clause: governing law, arbitral institution or court, and seat of arbitration.
- Have a professional review the agreement before signing.
A well-drafted bilingual contract is the foundation of a safe cross-border deal.