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The importance of language in contracts with China

In the context of contract drafting in China, the choice of language plays a key role in the clarity of transactions and the resolution of potential disputes. In this article, we will explore at length the question of whether it is more advantageous to have contracts drafted in Chinese or in other languages, and its importance in preventing problems and future disputes.

The language in which a contract is drafted is an essential and strategic issue. Although many international contracts are drafted in two or more languages, it is vital to designate an official language to avoid future problems in case of disputes. Moreover, the choice of language determines how disputes will be resolved in the future. If a contract is drafted in both languages, an official language should be specified in case of conflict. Having two official languages increases the possibility of ambiguity and the legal costs associated with contract interpretation.

Focusing on China, when faced with a dispute, it is paramount that the contract is in Chinese. If the contract is in English, the Chinese courts will use their own translators, which can lead to biased or incorrect interpretations. Therefore, we always recommend our clients to have such contracts translated into Chinese in advance to ensure accurate understanding before signing.

In addition, accuracy in communication is very important, as unclear terms and agreements can lead to problems in Chinese business relations. Therefore, providing the contract in carefully drafted Chinese will prevent future disputes by clearly stating the content of the contract from the outset.

Similarly, the choice of language is key in establishing the ideal location for resolving disputes. If opting for dispute resolution in Chinese courts, having the contract in Chinese is essential to facilitate and expedite the process, as Chinese courts are often the best option for dealing with manufacturing disputes. This is due to their ability to issue court orders quickly, such as stopping unauthorised production or returning moulds.

To conclude, the choice of Chinese language in manufacturing contracts in China is crucial. It is also important that it is thorough and leaves no room for contradictions. This will prevent misunderstandings and will also facilitate and speed up the resolution of disputes in Chinese courts.

Therefore, from our experience in China since 2003, contracts should be drafted in Chinese to be able to negotiate and avoid problems when interpreting them in case of conflict before the courts of the People's Republic of China.

By Francisco Javier Martín Reyes


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