China Contract Translations: What Were You Thinking?

The other day I was explaining to a client how important it is to have a trusted lawyer translate any Chinese-English contract and to emphasize that, I told him the following about a United States company that had fallen way down on its contract translation, to its extreme detriment:

United States company contracted with a Chinese manufacturer to make its product. United States company told the Chinese company that it would be “absolutely critical” that its product be delivered by August so as to be in the stores for the Christmas season. United States company calls our law firm in late August all but begging us to “force the Chinese company to live up to the contract.”

The United States company sends us the contract, written in both English and in Chinese, and it says the following:

    • English language version says product must be delivered by August 10.
    • Chinese language version essentially says Chinese manufacturer will do its best to deliver the product by August 10, but that if circumstances prevent it from meeting that date, its only requirement is to try to get the product out as quickly as it can.

We explained to the American company how in China unless a contract explicitly says the foreign language version controls, the Chinese language version controls and so only the Chinese language version was relevant. The United States company did not know this. They told us that they knew the Chinese language version was “relevant” and so they had used a “really good translator” to help them with that portion and she “must have missed” the difference regarding the delivery dates.

Cynical me is convinced that the translator did not “miss” a thing, but was paid well by the Chinese factory to say nothing about the delivery date discrepancy. I say this in part because the “remedy” the Chinese factory immediately suggested (which our client took, because it had no choice!) was to up-charge by 20% to “expedite” product delivery.”

Bottom Line: Before you sign a contract, you should know exactly what it says and what it legally will mean.