Drafting for Bilingual Contracts

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By Kevin Harris

On June 23, 2015, $50 million disappeared in the blink of an eye. This loss was not caused by a stock market crash, a natural disaster or a slick heist. Instead, the culprit was a seemingly small, but ultimately devastating mistranslation in a bilingual real estate contract.

Thankfully, this was only a fictional story that Peter Davies and Vivian Yuan of Thomson Reuters’ Practical Law China told to illustrate the importance of translation and attention to detail in bilingual contracts. The story had its intended effect. The attendees at AmCham’s “Practical Drafting for Bilingual Contracts” event left understanding that there is no margin for error in this area of the law.

Thomson Reuters’ Practical Law provides template contracts and other documents to law firms and businesses. Using these contracts as a framework, lawyers can avoid reinventing the wheel and provide legally sound yet cost-effective services. Though Practical Law has been popular in England for decades, it's relatively new to the US and China, where bilingual contracts are common.

In the story of the $50 million mistake, the misuse of one Chinese character was enough to make a contract unenforceable. While there are more exciting ways to lose a fortune, bad contracts are far more common. As the presentation made clear, knowing how to manage the complexities of bilateral contracts is a valuable skill for attorneys as international trade continues to grow.

Kevin Harris is a Communications Intern at AmCham China.