Note: This blog post was originally written in Japanese for our Japanese website. We used our machine translation platforms to translate it and post-edit the content in English. The original Japanese post can be found here.
As globalization progresses, Japanese companies are increasing their transactions with overseas companies. Translating a contract is not merely a linguistic replacement; it is a crucial task for accurately understanding transaction details and avoiding misunderstandings and legal risks. Even if you believe you understand the content, subtle differences in expression can often lead to problems later on. This post explains practical points such as the types of contracts, how to request translations, and how to utilize machine translation in the work.
Types and characteristics of contracts
There are various types of contracts, each with different points to consider during translation.
Representative examples include the following types.
- Purchase Agreement: This agreement specifies the terms and conditions of sale and purchase of goods, delivery dates, and prices. Attention must also be paid to the units of quantity and amount.
- Non-Disclosure Agreement (NDA): This agreement clarifies the scope of information and the protection period. The scope of protection may unintentionally change depending on how terms are translated.
- Service Agreement / Licensing Agreement: These agreements define the scope of work and rights. It is important to accurately convey the meaning of each clause.
When translating contracts, the highest priority is not to alter the legal meaning of the clauses. Therefore, appropriate expressions that fit the context are required, rather than mere literal translations.
Languages that Japanese companies request for translating contracts
English is by far the most common language that Japanese companies request for translation in overseas transactions. In addition, there are other Asian languages such as Chinese, Korean, Thai, and Vietnamese, and depending on their business partners, European languages such as German and French.
- English: Legal expressions are difficult to convey through literal translation, and it is important to maintain consistency throughout the document.
- Chinese: The meaning can easily change depending on the structure of the clauses and the choice of legal terms.
- Other Asian languages: Attention must be paid to differences in cultural and legal backgrounds.
For translation of contracts, it is necessary to be aware of not only the characteristics of the language but also the laws and customs of the counterparty country.
Options for requesting translation: translation agency vs. law firm
There are two main options for requesting translation of contracts: a translation agency and a law firm. Each has its own advantages and disadvantages.
When requesting a translation agency
Advantages
- Relatively low cost and short turnaround time.
- Can request together with documents other than contracts.
- In addition to the conventional translation work, there are multiple translation methods such as machine translation and post-editing.
Disadvantages
- Limited support for legal risks.
- Legal interpretation of detailed clauses is difficult.
When requesting a law firm
Advantages
- High legal accuracy and ability to check contract risks.
- Can handle clause adjustments and negotiations with overseas business partners.
Disadvantages
- High cost.
- Delivery time may be longer.
- Not suitable for large volumes of contracts.
For high-priority contracts or important cases with your overseas business partners, it is reassuring to consult a law firm. Conversely, for internal reviews or for translating large volumes of contracts at once, engaging a translation agency is more efficient.
How to utilize machine translation and post-editing
In recent years, the accuracy of machine translation specializing in legal documents has improved, and the reproducibility of legal terminology has also increased. Therefore, it is useful when drafting contracts and implementing internal reviews. In particular, if machine translation is set up internally, the process of checking each clause can be streamlined, and it can also be utilized as a preliminary step before engaging a translation agency or law firm.
- Examples of how to utilize machine translation
- Grasp the outline of the provisions and streamline internal reviews.
- Effectively standardize technical terms and manage version history.
- Examples of how to utilize post-editing (PE)
- Have translators or editors correct translation errors to improve accuracy.
- Handle important contracts and contracts with frequent clause changes.
*Post-editing refers to the process of manually modifying the output of machine translation to produce a suitable and natural translation.
However, machine translation alone cannot fully reflect the subtle nuances of contract clauses or legal risks. Therefore, final contract approval and confirmation of important clauses always require expert review. While highly effective for confirming a draft quickly or processing large volumes of contracts, it is safer to use it in a limited capacity for contracts with high risks.
Summary
When translating contracts, it is important to consider the purpose and importance of the contract, and to strike a balance between accuracy and cost/turnaround time.
There are several options for translation such as:
- Choose and work with a translation agency or law firm depending on the type and importance of the contract.
- If machine translation is already introduced in your company, utilize it. If you want to ensure greater accuracy, use post-editing effectively to improve efficiency.
- Always check the interpretation of a clause to avoid misunderstandings and risks.
Contracts for international transactions are important documents directly linked to a company's credibility and business. Carefully selecting the translation method and where to request, and proceeding with translation accurately and efficiently, are key to success.
Kawamura International's translation services
Kawamura International handles translations in a wide range of fields, including IT and software localization, medical devices and pharmaceuticals, tourism, manufacturing, finance, business and legal affairs, and SAP-related documents. We will assign the most suitable translator according to your industry and field of expertise. You can rest assured of the quality, as our translators are experienced professionals who have cleared our screening standards. If you are considering to request the translation work to a translation agency, please feel free to contact us.
