Published On: November 20, 2025
Category: Legal News
You have just closed a promising deal with a manufacturer in South Korea. The terms look solid, the price is right, and you’re ready to scale production. There’s just one small detail—the contract is in Korean. No problem, you think. You will run it through translation software, maybe clean up a few awkward phrases, and then you are good to go.
Six months later, you’re sitting in a conference room with lawyers on both continents, trying to untangle a dispute that’s costing your company thousands of dollars per day. The culprit? That “quick and easy” translation seemed perfectly adequate at the time.
When “Close Enough” Is Not Good Enough
Translation software has come a long way. It can help you order dinner in Tokyo, navigate a subway in Barcelona, or catch the gist of a news article in German. But contracts? That is a different beast entirely.
Here is the thing about contracts: they’re not just documents. They are carefully constructed legal frameworks where every word carries weight, every phrase has precedent, and every comma can mean the difference between a minor disagreement and a full-blown international legal battle.
Modern translation tools are impressive, but they are fundamentally designed to convey general meaning. They struggle with the precision that legal language demands.
When a contract specifies “reasonable efforts” versus “best efforts” versus “commercially reasonable efforts,” those aren’t just stylistic variations—they’re distinct legal concepts with different implications for your obligations. Translation software typically can’t distinguish between these nuances, let alone translate them accurately across legal systems.
Cultural and Legal Distinctions in International Contracts
Let me share a scenario that’s all too common. An American company entered into a manufacturing agreement with a German partner. Both sides utilized translation software to review the contract. The English version included a clause about “consequential damages” and liability limitations, stating that neither party would be liable for “indirect or consequential losses” beyond a specified cap.
Sounds straightforward, right?
Wrong. The German version translated this using standard commercial language. Still, the problem is this: German civil law doesn’t recognize the common law distinction between “direct” and “consequential” damages in the same way. Under the German Civil Code (BGB), there’s a concept called “Mangelfolgeschäden”—damages resulting from defects—which does not neatly map onto American categories. What the American company considered a standard liability limitation was interpreted by the German manufacturer as much more restrictive.
When a production defect led to equipment failure at the American company’s facility, causing downtime and lost profits, both parties were stunned. The American company expected compensation for these losses, believing they fell outside the limitation clause. The German company refused, interpreting their version as covering exactly these types of claims. The dispute dragged on for months, with expensive legal opinions from both jurisdictions trying to reconcile what should have been a simple liability clause.
Neither side had intentionally tried to mislead the other. They had each read their version of the contract and thought, “Yes, this is obvious. This is exactly what we agreed to.” Their cultural assumptions and legal frameworks were so different that they had essentially signed two separate contracts, despite thinking they were on the same page.
The Three Hidden Dangers
The Technical Failure
Translation software makes mistakes—sometimes big ones. Legal terminology is particularly treacherous because words that seem straightforward can have highly technical meanings. “Consideration” in a contract doesn’t mean thoughtful reflection. “Force majeure” is not just any unforeseeable circumstance. Miss these nuances, and you might find your licensing agreement full of unintended loopholes or unexpected obligations.
The Cultural Disconnect
Every legal system reflects the culture from which it comes. American contracts tend to be lengthy and explicit, trying to account for every possible scenario. Many Asian contracts are shorter and rely more on the parties’ relationship and general principles of good faith. European contracts often fall somewhere in between, with their own regional variations.
When you translate a contract without understanding these cultural contexts, you can end up with a document that seems clear to you but is interpreted entirely differently by your international partner. A clause on dispute resolution might seem like standard boilerplate to you. Nevertheless, your German manufacturer might view it as overly aggressive or contrary to their expectations of a partnership and good faith dealing.
The Legal System Gap
Here is a sobering reality: some legal concepts simply do not translate because they do not exist in both legal systems. The common law tradition (used in the U.S., the UK, and other countries) differs fundamentally from the civil law tradition (used in most of Europe, Asia, and Latin America). Concepts such as “promissory estoppel” or “piercing the corporate veil” may not have direct equivalents in civil law jurisdictions.
When translation software encounters these gaps, it makes its best guess—and that guess can create serious problems. Your sales agreement might reference legal concepts that are enforceable in U.S. courts but meaningless or unenforceable under the laws governing your foreign partner.
The Smart Solution: Invest in Working with Skilled Attorneys
The solution isn’t complicated, though it does require an upfront investment: work with qualified attorneys in both jurisdictions.
This does not mean you need to hire an expensive international law firm for every deal. However, you do need legal professionals, such as the experts at Lantz Law Group, who understand both the language and the legal systems on both sides of the agreement. For manufacturing agreements, licensing deals, distributorships, and sales contracts spanning international borders, this dual expertise is essential.
A good international attorney will do more than translate words; they will also provide expert guidance. They’ll translate legal concepts, adapting them to work within both legal frameworks. They will flag terms that might be misunderstood across cultures. They will ensure that when both parties read their versions of the contract, they are genuinely agreeing to the same terms—not just words that seem equivalent but that mean different things.
International Contracts Demand More Than Software
Translation software is a valuable tool for many purposes. However, when it comes to contracts that could make or break an international business relationship—or cost your company significant money in disputes —it’s a false economy to rely solely on automated translation.
Your international partnerships deserve the clarity that only qualified legal professionals can provide. In the world of international contracts, getting lost in translation isn’t only inconvenient but also expensive, time-consuming, and entirely avoidable.
Save the translation apps for your vacation photos and for ordering food in that French restaurant. When it comes to contracts, invest in the human experience that protects your business interests across borders and languages.