Interpreting the English “legalese” used by many international business contracts is no easy matter, reports Richard Tyler. How quick is “promptly”? What is the difference between a “representation” and a “warranty”, and are “best endeavours” better than “best efforts”?
These are just some of the problems foreign lawyers and judges face when trying to interpret contracts drafted in English.
As big companies and financial institutions drive the use of English as the international language of business, so English language and “legalese” is increasingly used in contracts – even where neither party understands English.
Which is why international financial lawyers felt it necessary to hold a seminar on the problems of English legalese at the International Bar Association's (IBA's) conference in Barcelona last week.
Problems occur when a dispute arises and foreign courts examine the contract – or one that has been translated into the local language – to determine the intentions of the parties.
These courts interpret English legalese in a number of ways. Some jurisdictions look at the phrase in the context of local law. Others export the interpretation of English courts.
But there is no global rule setting out how courts should approach the issue.
The (IBA) seminar was led by a panel of 12 lawyers from 10 European countries and one each from Australia and Canada. It attempted to illustrate the particular rules of different court systems governing contracts drafted in English.
One of the main problems it identified was that many courts require documents written in any foreign language to be translated by an official translator into the official language of the country.
But there appears to be no set rule. Some courts will look at the original document written in English when the translation is unclear.
Pavl Pensa, of Slovenian firm Jadek & Pensa, noted an occasion where a judge in a court in Slovenia rejected the translation of the English language contract, instead preferring to use his own knowledge of English to glean from the original document the real intention of the parties involved.
Juan Antonio Riudavets, of Barcelona firm Prol & Associados, said there was special treatment in Spain of contracts written in one of the languages of the Spanish Autonomous Communities – Basque, Catalan and Galician. Documents written in these languages did not have to be translated into standard Castilian.
Piercarlo Fresta, of Milan firm Studio Legale Rinaldi e Associati, suggested creating a pocket guide to the interpretation of English legalese, agreed on by all European court systems. But he admitted that this was easier said than done.
Stephen Revell, capital markets partner at Freshfields, added with a grin that a solution might not be in the best interests of English solicitors. Many are drafted in by foreign courts to give expert evidence on the meaning of English legalese and would be reluctant to give up such lucrative work.
He also pointed out that even in England, there can be ambiguities interpreting English words. The phrase “a thousand rabbits”, for example, was held by a court hearing the case of Smith v Wilson in 1832 to mean 1,200 rabbits.
This is because the phrase had a particular meaning in the regional dialect in question – in the same way that “a baker's dozen” means 13. The judge ruled that the local “customary” meaning took precedence over the “ordinary” meaning.
But Revell was keen to stress to his foreign colleagues that the phrase applied only to rabbits – and definitely not to pounds sterling.