What Is the Difference Between a Standard and a Bilingual Contract, and Which Is Better for Business?

In an international transaction, the language of the contract is not a technical detail. It decides which text the judge or arbitrator will read when the parties interpret the terms differently. There are two common models: a contract in one language with a separate translation, or a bilingual contract, where both texts are in a single document.

In this article we explain how these models differ, what risk each one carries and when each one is the better choice. At the end you will find a checklist of what to verify in a bilingual contract before signing.

A standard contract and a separate translation

In this model there is one signed original, for example in English, and its translation as a supporting document. Nobody signs the translation and it has no legal force: it exists only so that the other party, or its accountant, can understand the text.

The risks:

• One party relies on a translation it never signed. In a dispute it cannot point to the translation - the court will read the original;
• The versions drift apart - an amendment goes into the original, the translation stays as it was, and six months later the company's accounting department is working on different terms;
• The numbering gets mixed up - Clause 8.2 in the original may be 8.3 in the translation, and a clause cited in correspondence ends up referring to a different obligation;
• The quality is unknown - a separate translation is often prepared by an employee or a machine translator, and nobody notices the terms that have been confused until after signing.

This model is still the right one in many cases: when one party knows the language of the original, when the translation is for internal use, or when a Georgian bank or the registry needs it for information only.

A bilingual contract: one document in two columns

A bilingual contract is one document in two columns: one language on the left, the other on the right. Each clause sits next to its translation, and the parties sign both texts at the same time.

The advantages:

• One document, one signature - each party signs the text it actually reads, and there is no longer any ground for a "lost in translation" dispute;
• Quick comparison - each clause sits next to its translation, so a lawyer spots an inconsistency at the negotiation stage;
• Amendments in one place - a change goes into both languages at the same time, and there is no separate file;
• Georgian authorities - the Public Registry's instruction requires a Georgian translation of a transaction drawn up in a foreign language; in a bilingual contract the Georgian text is already in the document.

The bilingual format has a downside too: it takes longer to prepare, because every change has to be reflected in both columns, and the final text of the contract is only locked once both versions have been agreed.

Prevailing Language: the one sentence that settles a dispute

A bilingual contract must state which language prevails in the event of a conflict. For example: "In case of any discrepancy between the English and Georgian versions, the English version shall prevail."

Without this clause, both versions have equal force. If a difference between them comes to light, the court or arbitrator will have to work out what the parties meant - and that costs time and money, with an outcome nobody can predict.

A foreign investor usually wants the English version to prevail, and a Georgian company wants the Georgian one. A common compromise is to make the prevailing language the language of the country whose law governs the contract, or the language in which the arbitration is conducted.

An example: one word, two obligations

Imagine a supply contract between a Georgian manufacturer and a German distributor. The English text says: "The Supplier shall use reasonable endeavours to deliver the Goods by 1 March". The Georgian translation, prepared by one of the manufacturer's employees, says "მიმწოდებელი ვალდებულია მიაწოდოს საქონელი 1 მარტამდე" - "the Supplier is obliged to deliver the Goods before 1 March".

The English text is an obligation of effort: the supplier has to try. The Georgian text is an obligation of result: the supplier has to deliver. If the delivery is late, the Georgian director believes the contract has been breached, while the German lawyer believes it has not. If the contract is bilingual and English is the prevailing language, the dispute will be decided on the English text. If no prevailing language is specified, each party has an argument of its own.

Where inconsistencies between the two versions arise

When we review bilingual contracts, these are the issues we find most often:

• Shall and may - an obligation in one column, an option in the other;
• Indemnity and Guarantee - two different obligations rendered by a single word in Georgian;
• Business days and calendar days - deadlines are counted differently in the two columns;
• Including but not limited to - the list is open in one version and exhaustive in the other;
• Amounts and currency - the figure says one thing, the amount in words another.

The most dangerous clauses are Force Majeure, Jurisdiction and Liability, because those are exactly the ones people read first when something goes wrong. More details: contract translation.

Which one should you choose?

• Bilingual - when both parties sign and each wants to read the text in its own language: supply, distribution, lease, loan, an employment contract with a foreign employee, a shareholders' agreement;
• A standard translation - when you need the translation only for internal use, for a bank or for information, or when both parties know the language of the original.

If the contract has already been signed in one language, you can move to a bilingual version through an amendment agreement that the parties sign again. If you already have both versions but are not sure they match, a review and edit on its own is possible: editing and proofreading.

Checklist before signing

1. The contract states the prevailing language;
2. The clause numbering matches in both columns;
3. Every term in the Definitions clause is used consistently in both languages throughout the text;
4. Amounts, currency, percentages and deadlines are identical in both columns;
5. The annexes are in both languages, or the contract states which language they are in;
6. The names of the parties and their identification numbers match the registry extract.

How we prepare the bilingual format

TARGMANEBI prepares a bilingual contract in Word, as a table, with unified numbering and a glossary of definitions, so that your lawyer can edit the text. We check the Force Majeure, Jurisdiction and Liability clauses twice, and where needed we sign an NDA before receiving the file. A standard contract is ready the same or next day.

How to order a bilingual contract

Frequently asked questions

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