China contractWhen my law firm writes contracts for our American and European clients doing business in China or with China, we write the contracts in both Chinese and in English. We do not translate these contracts into Chinese. Let me explain this distinction because it is a very important one.

We price many of the more routine China contracts on a flat fee basis, and that fee includes our drafting the contract in English for our client’s review, and then putting that same contract into Chinese, as its official language. But every so often, one of our clients will ask what we would charge if we were to draft the contract in “just English” and allow the client’s “fluent Chinese” speaker to translate it into Chinese. I usually respond by joking that we not only do not give any reduction, we actually increase the fee by $5000 to help cover our increased risk of a legal malpractice lawsuit. I then tell them that in reality we simply cannot agree to anyone outside our firm drafting the Chinese version.

Why do I say this?

Because every word matters in a contract and this is as true in Chinese as it is in any language. Words have very particularized meanings in contracts and those meanings are sometimes different in a contract than in real life. Contracts also have terms that have become recognized and defined over time. The only people who can truly know how to use these specialized and particular words and terms are lawyers who know both China’s contract laws and who are completely fluent in written and spoken Chinese. On top of this, it is critical that the Chinese version explicitly reflect our client’s goals. To put it another way, we pretty much never see a “translated” contract that works as intended.

We draft our Chinese language contracts in Chinese so that they can be understood by our client’s Chinese counter-party and so that if there is ever a dispute and our client finds itself before a judge or an arbitrator in China, that judge or arbitrator also can understand the Chinese language contract in the context of Chinese law.