French or English

27 February 2004

Sylvie De Oliveira

IT agreements such as licence, maintenance, or service agreements are commonly drafted in English. To some extent this may be because many software editors or service providers are American or British companies and therefore most of the contractual negotiations are based on UK or US standard agreements.

Contracting parties seem obliged to draft in English not just for contracts governing the day-to-day operation of the IT systems but also for their larger projects such as outsourcing deals (currently termed “mega-deals”). The international nature of such projects seems to lead the contracting parties to use English as the contractual language since English is the most international language.

Is there, however, a true and imperative reason to justify the use of the English language to draft IT agreements? Far be it from us to be prejudiced, but we believe the position to be debateable. Two aspects of the debate are considered: (1) are the contracting parties absolutely free to choose their contractual language? (2) how can such a choice affect the agreement?

1. Free or limited choice?

Are the contracting parties free to choose the language of their contract?

Legal standpoint

The Convention of Rome dated 19 June 1980 (on the law applicable to contractual obligations) states that the parties can choose the law which will govern the form of their contract and hence, its language. If the parties remain silent, then the form of the contract is submitted to the law governing the content of the contract according to the Convention or to the law of the country in which the contract would be signed.

In France, since Law n°94-665 dated 4 August 1994 was introduced, commonly known as the “Loi Toubon”, the contracting parties are subject to some particular requirements in respect of customer protection and to preserve the French language.

Therefore, according to these legal provisions, the French language has to be used in the consumer context for purposes including: labelling, offer, presentation, instructions and description of warranties regarding goods, services or products and invoices. The position is the same for contracts entered into with a public entity. If this is not complied with, a party will not be able to take advantage of the provisions drafted in the foreign language if such provision may be harmful for the other party.

Aside from these rules of law and order, the French civil rule remains applicable, i.e. “Les conventions legalement formees tiennent lieu de loi a ceux qui les ont faites.” (Article 1134 of the French civil Code)which means that “Lawfully concluded agreements represent the law for the parties who created them”. It does mean that contracting parties are free to choose the language in which their agreement will be drafted.

But do the contracting parties take advantage of such freedom?

Business standpoint

Currently, more and more foreign companies provide their partners or customers with English and French versions of their agreements. If not, a French contracting party may require a French version to be produced. Hence, from a business standpoint, it can be an advantage to anticipate this and provide both versions of the standard forms. In such a case, contracting parties should not forget to specify which version would prevail in the event of conflicting interpretations.

Regarding the “mega-deals”, parties instinctively choose the English language in order to take into account the cross-border nature of the contractual and technical scope of the project. The business standpoint here is totally different since the stakes are higher. Moreover, the volume of work involved in preparing the translations of all the contractual documents at the same time as conducting negotiations generally leads the parties to only draft in English.

This could be quite unfortunate since the choice of the language may strongly affect the drafting of the contractual documents.

2. How the language of the contract may impact upon its contents

The use of a language is not neutral in drafting the agreement. If a language is used for drafting, it is implicit that the parties consent to interpretation in that same language. The consent of the parties will be raised from the writing of the contract and the deal will be interpreted in consideration of this same writing.

Therefore, the language that is used for drafting determines and conditions the definition and scope of the contractual obligations and duties. It is essential to be sure that the parties give the same sense and significance to the terms used.

As well as the risk of drafting in a foreign language, there is also a very real risk relating to the interpretation of an agreement. It is not uncommon to come across notions (often legal) which have no equivalent translation. Examples of such French legal notions that are often used in IT contracts: include “maîtrise d’oeuvre”, “maîtrise d’ouvrage”, “engagement solidaire/conjoint”, “obligation de résultat/moyens etc. In such cases, the contracting parties have to use similar terms that may be unsatisfactory and detrimental to the significance of the commitments that the parties wish to transcribe in their agreement.

Consequently, when one of the parties does not have control of the contractual language, it seems that this party may lose, little by little, the content of the contract because it does not have the control over drafting.

In conclusion, using one’s own language for the negotiation and drafting of an agreement can avoid the problems of inadequate or inappropriate expressions, and is a key strategy in keeping control of the negotiations. Unfortunately, however, this point is often overlooked.

Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.