Funny Contract Errors

A part of my work is reviewing and litigating international commercial contracts and it is not unusual to see clauses that are difficult to interpret due to poor drafting, translation errors or clauses in the wrong context. Some of my favourites are below:  

 From a trademark licence (licenza di marchio) 

• When Licensee misuses the Brand, the Licensor can seize him and additionally seek payment of money.

Apart from the fact that this constitutes the criminal offence of kidnapping, it raises other questions:

-         Even if payment is made, there is no contractual obligation to release the Licensee. Is the intention that he can be retained forever by Licensor in part satisfaction of damages for the breach?

-         Does the ‘payment of money’ the Licensor can claim include the costs of keeping the Licensee in captivity? (he could have a big appetite).

-         Is the seized Licensee entitled to the minimum human rights recognised under international law (i.e. access to free WIFI and a Netflix account)?

-         What is the remedy if Licensor does not want to keep him, but his family doesn’t want to take him back? 

-         Are female Licensees excluded from the Licensor's right to seize?

From a sales contract (contratto di vendita)

• The buyer must not use the Products to create missiles and/or chemical weapons.

This is clearly an ethical company, however this was in a contract for the supply of ladies summer shoes. How much damage can you do with a plastic flip-flop?

That said, a definition of missile is ‘an object which is forcibly propelled at a target, either by hand or from a mechanical device’. It follows that if, in a moment of temper, the buyer’s CFO were to throw an infradito at his dog, technically a breach of contract would occur, allowing the seller to terminate the entire agreement pursuant to article 23 and claim damages.

 From a joint venture contract

•  The directors must attend bored meetings.

First assumption is that the writer meant board meeting. However, on reflection, the wording could be deliberate; the riunione del consiglio di amministrazione can be noiosa.

 From an employment contract (contratto di lavoro)

• Mrs Rossi must not manage, steer or head a business competitive with the Company for ten years after employment termination.

Mrs Rossi was a 64-year-old, part-time cleaner for a multinational beverages’ manufacturer. Unsurprisingly, she was not concerned that the clause may prevent her becoming CEO in Coca Cola Inc.  

Turnkey contract (contratto chiavi in mano)

• The main contractor must not put its prophets over employee health and safety.

 I think you can imagine what the writer meant to say …. 

 Supply of machinery contract (fornitura macchinari)

• The buyer will pay the final instalment of the Machinery price when the good-will is concluded.

The Italian word, avviamento means ‘goodwill’ but also 'start up’. This translation error could mean that seller will be waiting for the final instalment for some time….

* * *

#umorismo