Not many German lawyers are going to feel they have got their money’s worth if a contract translation does not contain a few shalls. I agree that it’s probably best to take an intermediate line – neither completely avoid shall like the modernists (following a movement in the English-speaking legal world outside the USA; see Clarity) nor use it very liberally.
When to use it? I would stick to obligation in the third person singular (‘The tenant shall pay the rent at the beginning of each month’). To quote the NYLJ article:
One way to address overuse of “shall” is through more disciplined use of the word. I advocate using “shall” only to express an obligation that’s imposed on the subject of a sentence in the active voice – “Doe shall purchase the shares from Acme.” (But if a contract uses the first or second person – that’s sometimes the case with letter agreements – your best bet would be to treat it as analogous to a consumer contract and not use “shall.”)
It would be better to have an active subject, not ‘The rent shall be paid…’ – who is to pay it? But translators can’t change their original if that’s what it says.
There are some cases where courts have had to interpret what ‘shall’ meant, but that should not be the case if you translate a German text where the German is to prevail: the court would have to interpret the German, not the English.