Freelance service providers – Beware of unlimited liability clauses in agreements

 

[minefield warning*]

The attitude of many freelancers staring at a long agency agreements with small print is either to consider it a “mission impossible” to actually read and understand it or fatalistically hope that it never becomes relevant, whatever it is written there. Thus, feeling helpless, they sign it blindly. Unfortunately, most agency service agreements include a very problematic clause that should and can be negotiated. Specifically, numerous agencies try to impose unlimited liability on the service provider for any damage, direct or indirect, resulting from an error. To quote a recent agreement I received: “The supplier shall ensure that the goods or services it provides are free from defects and feature the warranted characteristics. The liability of the supplier in this respect is unlimited.” This potential for huge loss is real but the service provider can quickly and easily identify the terminology in the contract and have the agency insert reasonable liability language, eliminating the risk.

It is a mistake to dismiss such a risk as theoretical only. First, it is true that US and possibly European consumer law possibly does protect parties from outrageous terms in “adhesion contracts”, agreements such as those binding consumers on various Internet sites and purchase agreements. However, these laws often do not protect agreements between businesspeople, who are expected to read and understand what they sign. Furthermore, many freelancers, especially translators, mistakenly believe that the clause is on paper only and is never applied. I personally know of one incident of a translator that had to pay for reprinting of a run of books after the publisher belatedly discovered a critical error. As in all statistical incidents, there is no consolidation in being the 1 in the nth number. Unfortunately, liability insurance is generally not a practical option as In most countries, the premium is far too expensive to justify given the freelancer’s income and frequency of events. Thus, ignoring the risk can be ruinous.

To protect themselves, freelance service providers merely need to take the following steps. First, conduct a search (Control F) in the Word or PDF document for the words “indem” and “liab” The results should identify those clauses that contain “indemnify/indemnification and liable/liability and may pose some risk. In my opinion and I am not a lawyer, it is possible to ignore those terms when they refer to data protection or non-disclosure as the freelancer has full control of the matter. However, if the agency wants to impose unlimited liability on the service provider for defects, a matter of disputed definition and wide-ranging consequences, it is necessary to  negotiate and insist on a restricting clause. In translation, it is standard to limit liability to the amount of the invoice. While a few agencies, generally the larger ones, refuse to compromise, most bodies  I have negotiated with have had no issue with the proposed clarification.

This efficient manner of identifying and avoiding a serious potential problem requires little effort and prevents financial stress and disaster.  Regarding the sentences cited in the first paragraph, the agency in question agreed to add the following sentence: “The service provider's maximum liability per occurrence shall not exceed the total amount invoiced.” We are now off and running. Even with individual customers, that limitation is a part of my conditions. An additional benefit, at least for a legal translator, is that the customers know that we actually read contracts. Knowledge is power.

 

* Picture captions help the blind fully access the Internet.

Picturecredit

Highly civil law – the other approach to contract law

 

[Man looking through a telescope*]'

Sometimes a person visits another family or country and discovers that an alternative way of doing something actually has many advantages. That was my feeling after an amazing two-hour webinar by Thomas West on Russian legal translation organized by the American Translators Association. I knew that the civil law system had different procedural elements as compared to the common law system However, his lecture opened my eyes to an entirely different manner of approaching contracts, which I have to admit has much virtue. The lecture also suggested ways for lawyers and translators to bridge between these two worlds to the benefit of their clients.

Before discussing contract elements, it is important to understand the differing bases of common law and civil law. Common law began in England and spread to its colonies and territories, including the United States. Under this system, while the legislature may set broad guidelines on policy on a given legal matter, the courts through their decisions define the specific elements. In the United States, due to its federal structure, each of the fifty separate states could theoretically have a slightly different interpretation, limited in practice by decisions of the US Supreme Court and rules of the Universal Commercial Code in certain matters. In practice, legal interpretation does vary significantly in the United States, requiring specialized knowledge by lawyers of practices in specific jurisdictions. Furthermore, under common law, an enforceable contract requires an exchange of consideration, i.e., each side actually has to promise to give the other party something of value. Accordingly, the declaration that one person will give a gift to another person has no legal standing as the receiving party has promised nothing in return. By contrast, the civil system, which is the accepted system throughout Europe, including Russia, involves a set of specific rules written by the government in explicit codes, most famously “the Napoleonic code”. Under this system, judges apply the written rule to the cases, generally acting as the investigator in order to match the facts to the rule. The civil law system is far more rigid and standardized.

Mr. West discussed contract law in Russia but mentioned similar frameworks in Europe, including France. He pointed out that the Russian civil code defines the conditions of 26 specific contracts, including leases, cargo and insurance, as well as determines the general conditions of all contracts. These terms may either be negotiable, i.e., the parties can agree otherwise, or mandatory, i.e., elements that cannot be waived. Curiously enough, civil law does recognize some gift contracts even when the other party does not provide consideration, some kind of compensating return. Thus, a civil law contract must only include those elements that are specific to the matter with the assumption that applicable civil code applies to all other matters. It is clear that European contracts can be much shorter and still provide sufficient coverage.

For attorneys and clients, this codex system radically simplifies life. Any individual seeking specific information about a term can consult the section on the specific type of contract in the codex, which generally has an official translation to the major European languages, and then compare it to the actual terms. For example, a contract that has no ending date of effectiveness is considered unlimited. It is also possible to write a contract that only partially relates to an existing form or even not at all. By contrast, an American plaintiff or defendant must consult a local attorney to ascertain how the relevant court will interpret a given term, who may not be able to provide an absolute answer. Flexibility has its price

For translators, this difference in approach creates terminology issues. For American translators, it may be possible to use terminology from Louisiana, which has some civil law elements, but Mr. West strongly advised avoiding this solution as most attorneys, not to mention their clients, are completely unfamiliar with this terminology. He suggested “nominate”, “innominate” and ’mixed” for contracts to distinguish those contracts specified in the code from those that are not. For contracts without consideration, he suggested ‘enforceable without valuable consideration”, which is clear, albeit a bit wordy. In any case, in order be thorough, legal translator may also need to consult the relevant codes for clarification.

The webinar also discussed language choice issues specific to Russian, which I found very illuminating in both confirming some of my previous terminology choices and correcting others. Beyond the technical matters, Mr. West’s webinar removed my culturally myopic disdain of civil law systems and allowed me to see the beauty of another approach. I am grateful not only for the knowledge I received but also for the perspective he provided. There is nothing like having your world expanded.

* Picture captions allow the blind to fully access the Internet.

Picture credit

Tradition vs. Clarity – The Legal Writing Conundrum

As a legal translator, I am by definition a legal writer.  As such, I apply my history, learned tendencies, and natural instincts every time I tap that keyboard.  In my case, the following are the most dominant:

a     .      My father was a journalist and instilled me with the love of brevity, i.e. why use three words when one will suffice.

b     .      I went to law school (the University of Oregon) but never practiced law, meaning I understand but have never written original legal documents.

c     .       I am also an English teacher with a thorough knowledge and respect of grammar rules, making me someone inflexible in regards to starting sentences with but and and, to name a few.

This background places me in a dilemma when I translate contracts, my favorite type of document because it actually tries to say something even in omission.  On the one hand, I want to adopt the American “plain language” initiative.  I love to eliminate extra prepositions, archaic shall’s, and redundant legal phrases such as last will and testament.  In short, I want the average educated person to quickly read and understand what s/he is signing.

  On the other hand, I may be wrong.  I recently participated in an ATA webinar on French and English legal translating.  The speaker emphasized the importance of reiteration in English legal writing as a means of avoiding ambiguity.  For example, in the following sentence, the second, underline will should be retained to ensure clarity: The Service Provider will provide the required materials and will guarantee their appropriateness for the intended use.  The second helping verb screams at me, albeit silently.  Still, if it is more important to be precise than concise, it should remain in the sentence.

So, after listening to the excellent webinar and reading Brian Garner’s opposite thinking book, Legal Writing in Plain English (2001), I find myself struggling to determine a policy when editing other people’s translation.  Should I correct them when they are wordy and old-fashioned?  Should I change my proletariat style and learn Dickens-like English? 

In all probability, I will stick to my beliefs and prefer the informal styling of legal writing.  I may adjust my editing to be more tolerant to those that have more respect for tradition.  Still, the ideal way is the most difficult, involving two proverbs: there are many ways to skin a cat (figuratively, of course); moderation in all matters, including moderation.  In other words, I will strive to accept the individual differences in writing style as long as it does not break some holy rule, such as beginning a sentence with and.

I happily invite reactions from translators, lawyers, and others.