What is contract redlining?
Redlining is the process of marking up a contract draft with proposed changes, deletions, and additions — tracking every modification so both parties can see what changed and why. The term comes from the traditional practice of marking changes in red ink on paper drafts.
In modern contract negotiation, redlining happens in Word (using Track Changes) or in contract management platforms. The back-and-forth of redlines between parties is how contract terms get negotiated before signing.
The redlining process
- First review — Read the entire contract. Flag sections that deviate from your standard or create unacceptable risk.
- Markup — Use Track Changes (or your contract platform) to propose specific edits. Delete unfavorable language, insert preferred language.
- Explanatory comments — Add comments explaining why you're making each change. "Our standard position" or "Removes unlimited liability" helps the other side understand your intent.
- Prioritise — Separate must-have changes (blockers) from nice-to-haves. Experienced negotiators know which hills to die on.
- Send for response — The vendor reviews your redlines, accepts some, rejects others, and proposes counter-edits. This continues until agreement is reached.
How AI changes the redline workflow
The first-pass review — identifying what's different between the vendor contract and your standard — is now automatable. AI tools compare documents clause by clause, flag deviations, score severity, and explain the risk in plain language. What took 2–4 hours per contract takes under 60 seconds.
This doesn't replace the negotiation — it accelerates the review. Your legal team still decides which redlines to propose and how to negotiate. AI just makes sure nothing slips through.