Marcello Mantelli | Lawyer in Milano-Torino (Italy)

The trade partners from various countries will mainly use English for the purpose of communication. Nevertheless, the possibility of misunderstandings is always present – during the negotiation process and when drawing up the contract. Let’s explore the reasons and the solutions that are available.

An international contract, in addition to being a practical way to protect the current business, is also a valuable means of communication. So, it is crucial to select the right contractual language, and, therefore, the language of communication between the parties to the contract, for the success of the commercial transaction.

Obviously, for the parties to the agreement who are Italian, the contract language should be Italian. When the parties to the contract are from different countries, more often than not, the language of the contract is that of the stronger party or that of a third country and this is often English.

English is the most important language in international business and commerce. However, it is important to note that not all the dialogue that is done in the course of negotiations or the formulation of an international contract is done in equal measure of English or any other foreign language.

However, if the international contract is written or modified by business people or technicians, they will try to the best of their ability to enter into a agreement and include clauses that may well be contradictory to each other in the heat of the moment or use terms that are not well defined from a legal point of view and can be interpreted in different ways in the event of a dispute.

Using translations from the various online translators does not necessarily mean that the legal terms used in the contract are accurate and meaningful. Even artificial intelligence warns that translations of contractual texts should only be consulted with the help of lawyers who are proficient in the subject matter and language.

Indeed, a poorly drafted clause can lead to differences in interpretation of the intended meaning by the drafter and the contract and, therefore, to disputes. In other cases, to ensure that there is no language misunderstanding (or a “national” stance), bilingual contracts are used, say, English-Russian, Italian- Russian, Italian-Chinese and so on.

However, in these cases it may be expensive to check that the Russian or Chinese translation of the English or Italian text is correct. The most convenient and economical way is to define, through a specific contractual clause, that only one of the two languages is the authentic language in case of disputes, and this will be the language that is easily understood by the Italian exporter.

In effect, this means that it is the only language to refer to in case of a dispute and that no reference should be made to the other language present in the contract text. However, if this cannot be compromised on the basis of the partner’s refusal to accept that the other language should be the only authentic language of the contract, then one may have to resort to the option of assigning equal importance to both languages.

But if there is a translation discrepancy then one of the two is to be adopted and this is the one that is easily understandable to the Italian exporter. The same attention should be paid to the annexes which have to be in the same language as the contract and which should be incorporated into the contract together with any introduction.

With respect to the method of disputes resolution, it would be helpful to specify the language of the arbitration procedure in case of an international arbitration, so that the choice is not made by the arbitral tribunal. It will usually be the same as the language of the contract.

On the other hand, if the international contract provides for the dispute to be referred to an Italian court, it would be best to provide for Italian as the language of the contract, but if this is not possible, then the documents can be translated into Italian during the court proceedings.

Therefore, the problem of language should be handled in order to ensure that the contract content is properly understood and managed, as well as to avoid any ambiguity in the communication between the parties in order to protect the business.