Contract translation is an important part of the wider range of legal translation services provided by many translation agencies. Many corporations are doing business overseas with foreign companies, governments, and contractors. In order for there to be stable business relationships, contracts between parties with different language backgrounds need to be translated accurately. Additionally, interpreting services must be used for any high-stakes meetings. Mistakes in these translations can often lead to embarrassing and economically costly outcomes. The following five examples poignantly demonstrate the importance of professional translation services when translating contracts and other legal documents.
1. South Korea’s Free Trade Contract Translation Snafu
In 2011, South Korea was in the process of drafting multiple free trade agreements with the EU and the US. The draft of the agreement between the EU and South Korea contained so many translation errors that it had to be put on hold, twice. Whatever language translation service the South Koreans used apparently didn’t learn from their mistakes. The South Korean cabinet had to withdraw its bill in the middle of negotiations with Washington due to numerous translation errors.
2. Poor Contract Translation Can Have Serious Financial Repercussions
In 2006, an American oil company, Occidental Petroleum, brought a case for arbitration before the International Center for Settlement of Investment Disputes. The Ecuadorian government seized one of Occidental’s interests in the Amazon rainforest, causing significant financial damage while also apparently violating a previous agreement between the Ecuadorian government and Occidental. The Ecuadorian government settled with Occidental, but due to poor legal translations of Ecuadorian case law, the damages awarded to Occidental were increased by 40%. Even though that amount was eventually annulled, both parties had to spend time and money on further legal expenses.
3. A Bad Contract Translation Leads To A Missed Opportunity
In 2018, the Argentinian soccer club Independiente sought to re-sign Bryan Cabeza, who was playing with Atalanta, an Italian club. Bryan had previously played for Independiente before, and the Argentinian club was looking to get him back. Instead of relying on a translation service company to professionally translate the contract, Independiente simply used machine translation to translate their contract into English. Unfortunately for them, the software they used translated Bryan’s name into “Brian Head” (Cabeza being the Spanish word for head). The contract was invalidated and Cabeza stayed with Atalanta. Independiente’s poor contract translation led them to fail to achieve one of their goals that season.
4. Translation Errors In China
According to various Chinese sources, some 5% of disputes between Chinese and foreign companies arise from poor contract translation. In 2011 a dispute arose over the English word “drydocking” being mistranslated as “tank washing”. In the same contract, the English sentence “except fuel used for domestic service” was translated incorrectly as “except fuel used for domestic flights”. These errors lead to confusion and unnecessary legal expenses. Using the translation and localization services of a reputable translation agency would have saved both parties a headache and financial expenses.
5. Poor Translations Have Consequences For The Future
This final example may be from 1840, but the ramifications were felt for decades after the initial event. In 1840, officials representing the British government signed the Treaty of Waitangi with the Maori people of New Zealand. The Maori version of the treaty stated that the Maori would be ceding governance rights to Britain, but not sovereignty. The British version of the treaty stated that the Maori were to cede governance, land, and sovereignty rights. This poor legal document translation led to a series of devastating wars whose effects lingered for at least a century.
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