Translation risk in contracts, wills, powers of attorney and corporate documents

Where translation errors arise

Translation errors in cross-border legal documents rarely result from ignorance of the language. They arise when a translator, a lawyer or a client chooses the word of one legal order to express a concept of the other. Four situations recur in Lugano. In the first, an Italian template is adapted for a Swiss transaction, so that Italian terms survive in a document governed by Swiss law. In the second, a Swiss document is translated into Italian by a translator trained in Italy, who replaces Swiss terms by their Italian lookalikes. The third situation arises when a document is drafted in English and translated into Italian for one party, so that the English term must be mapped onto two different Italian vocabularies. In the fourth, a client signs a document in a language he reads imperfectly, usually German or English, and later claims that he did not understand it.

Each of these situations has a typical consequence. The Italian template produces Swiss documents that use Italian concepts, which a Swiss court interprets under Art. 18 CO according to the real intention of the parties, often with unpredictable results.¹ A translation by an Italian translator produces Italian texts that look correct to Italian readers and are wrong in Swiss law. English as the original language moves the problem into the translation, where the choice between, for example, società a garanzia limitata and società a responsabilità limitata for "limited liability company" must be made for each party separately. The fourth situation raises the question of consent and error, which Swiss law treats under Art. 23 ff. CO and Italian law under Art. 1427 ff. c.c.² In banking relationships it is linked to the information duties discussed below.

Contracts

In commercial contracts the most frequent false friends concern security, representation and remedies. A loan agreement that requires a fideiussione from the shareholder, a share purchase agreement that speaks of the amministratori of a Swiss Sagl, or a distribution agreement that refers to the recesso (withdrawal) of a party without defining it, mixes the two legal orders. The Swiss and Italian concepts of termination illustrate the risk. Swiss law speaks of disdetta for the ordinary termination of contracts of indefinite duration and of recesso in a range of specific contexts. Italian law uses recesso as the general term for unilateral withdrawal (Art. 1373 c.c.) and risoluzione for termination for breach (Art. 1453 c.c.). Penalty clauses are another example. The Swiss pena convenzionale (Art. 160 ff. CO) and the Italian clausola penale (Art. 1382 ff. c.c.) both allow the judge to reduce excessive penalties, but the conditions and practice differ.³

The safest technique is to define every term that carries a legal concept specific to one legal order, either by reference to the statute ("the suretyship within the meaning of Art. 492 ff. CO") or by a description that does not depend on the terminology. A contract governed by Swiss law and drafted in Italian should use the Swiss terminology consistently, even if one party is Italian. If an Italian translation is needed for that party, the translation should keep the Swiss terms and explain them in brackets or in a glossary annexed to the contract. The temptation to "Italianize" the Swiss text for the comfort of the Italian party should be resisted, because the Italianized version carries Italian concepts that the Swiss governing law does not know.

Notes

1. CO, Art. 18(1), Italian text at https://www.droit-bilingue.ch/en-it/2/22/220-18-22.html; the provision is discussed in the section on bilingual drafting below. ↩
2. CO, Art. 23 ("Il contratto non obbliga colui che vi fu indotto da errore essenziale"), https://www.droit-bilingue.ch/en-it/2/22/220-23-27.html, with Art. 28 (dolo) and 29 (timore), Italian text at https://www.fedlex.admin.ch/filestore/fedlex.data.admin.ch/eli/cc/27/317_321_377/20250101/it/ html/fedlex-data-admin-ch-eli-cc-27-317_321_377-20250101-it-html-3.html; Codice civile, Art. 1427–1440 (section "Dei vizi del consenso"), Brocardi.it, https://www.brocardi.it/codice-civile/libro-quarto/titolo-ii/capo-xii/sezione-ii/art1427.html. ↩
3. CO, Art. 160 ("Rapporto fra la pena e l'adempimento"), https://www.droit-bilingue.ch/en-it/2/22/220-160-173.html, and Art. 163(3) (reduction of excessive penalties by the judge), https://www.droit-bilingue.ch/en-it/2/22/220-163-176.html. Codice civile, Art. 1373 (recesso unilaterale), https://www.brocardi.it/codice-civile/libro-quarto/titolo-ii/capo-v/sezione-i/art1373.html; Art. 1384 (riduzione della penale), https://www.brocardi.it/codice-civile/libro-quarto/titolo-ii/capo-v/ sezione-ii/art1384.html; Art. 1453 (risolubilità del contratto per inadempimento), https://www.brocardi.it/codice-civile/libro-quarto/titolo-ii/capo-xiv/sezione-i/art1453.html. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.