October 10, 2022

What is Redlining a Contract? Brief Guide for Perfect Contracts!

Looking to create a watertight contract with no scope for ambiguity? Learn how redlining a document can help you achieve that.

Redlining a contract is the process of highlighting the changes between the different drafts of a document. It displays the modifications made to the prior version. Redlining finds use in contract negotiations to illustrate edits between the previous versions of a proposed contract and a proposed revision. Redlining can happen between two parties drafting an agreement or even when negotiating a contract's provisions.


Black Lining vs. Redlining a Contract Document

Redlining and blacklining a contract are two same things though they sound different. Redlining refers to the process of marking up a document before you send it for printing. You can do it using a bright red pen so that it can be easily seen and remain visible.


The original document with all of the red marks on it is called the redline version. Once the document goes for photocopy, the red lines turn black due to the printing process. The document thus has blacklines instead of redlines.


When Should you Redline a Contract?

Redlining in contracts helps you highlight and mark up contract language or terms that have a scope for improvement. This can include areas where the language is unclear or ambiguous.

You should redline a contract when:

  •  You want to review or negotiate a legal document with the counterparty.
  •  You want to edit the contract and make those changes visible to the counterparty.
  • You want to edit the document internally among teams. For example, the marketing team might make a change and would want that to remain visible to the legal and compliance team.


Steps to Effectively Redline a Contract:

Here’s how you can redline a document efficiently.

Use the Strikethrough option. In Microsoft Word, you can use the Strikethrough button to redline documents manually.

To do so, follow these steps:

  • Open your document in Microsoft Word
  • Highlight the text that you want to redline
  • Click on the Strikethrough button (which looks like abc) in the Home tab of the ribbon
  • Use the font color option
  • Click on the text whose color you want to change and choose the "Font Color" option from the menu. 
  • The color palette will open up, and you can select any color you'd like or use the "Custom" option to make your own color. 

Ideally, you should use the red color, which remains synonymous with the track changes option.


Best Practices for Redlining a Contract

Here are some tips that will help you redline documents successfully.

Track all Changes

When you work on a document, it is vital to keep track of all the changes made. It will help you avoid accidentally overwriting something and become easier to revert to an earlier version if necessary. You can do this by using the track changes feature in Microsoft Word or Google Docs or by saving different document versions as you go along.


Understand the Software you Use

Every program has its own way of marking up documents. Some allow for more information, so ensure you know which features are available before you begin your editing process.


It is also essential to know how to use those features effectively to redline a document. For example, if you're using Microsoft Word, ensure to use the track changes feature instead of highlighting text, which tends to be more time-consuming and difficult.


Update Everyone about the Activity

When you redline a document, it is critical to keep everyone on the same page. After all, you don't want to be the only person who knows what's going on. Ensure you keep everyone updated about the changes and when you made them. That way, if someone else makes a change that conflicts with yours, they will be able to see what your intentions were before they got in the way.


Ensure a Legally-Compliant Language

Ensure that your document is legally-compliant by using a clear and precise language. You should also avoid potentially misleading or confusing statements. Be wary of using words that have multiple meanings or have the chance to get interpreted differently. Consider whether the message you want to convey is appropriate and necessary.


Furthermore, avoid making declarative statements, such as “we can do this” or “this will not work.” Instead, use phrases like “we believe it may be possible for us to do this” or “we believe that this may not work.” This makes it clear that the information provided is only an opinion rather than a fact or guarantee.


Watch Out for Errors

Check for grammatical and spelling errors. If you change an existing paragraph or sentence, ensure all the words in that paragraph or sentence spell correctly.


You should also look for any typos or misspellings introduced by other changes you made during the redlining process—you don't want to introduce any new typos when you fix old ones.


Bottom Line

Redlining is a critical activity that can have a wide-ranging impact on your contracts and agreements with vendors and suppliers. When redlining a contract, ensure you follow the best practices to avoid potential issues down the line. After all, you would want to spend time growing your business and not on activities that do not contribute to your bottom line.

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