Contract Redlining – Best Practices Produce Better Results

Contract Redlining - Best Practices Produce Better Results
by Deirdre Leone

You may have redlined hundreds of documents and dozens of contracts suppliers, customers, employees, and partners. Your edits and negotiations may have ended with a signed contract. But they may have produced unwanted side effects like bruised egos, distrust, or reduced deal values.

From start to finish, the conversations between your company and the other party might have been friendly and positive. Yet, there may have been administrative errors along the way – those that caused your business to take undue risks or the other party’s legal team to have doubts about your ability to deliver on your promises.

To ensure that your business relationships get started on the right foot, add the following best practices for contract redlining to your corporate legal playbook.


Are your contract management and corporate legal teams bogged down authoring and reviewing stacks of contracts? Today, many businesses find it challenging to process more workflows with fewer people resources. The redlining and negotiation process sets the tone for how a business relationship will unfold

Instead of hiring more full-time employees or outsourcing contract review, consider purchasing and implementing an AI-enhanced contract management system (CMS), with automated review functionality. Review, redlining, and negotiation are all fundamental elements of the contracting process.

Even the best among us can only consume so many clauses, peruse so many pages, and assess so many appendices before our eyes and minds skip over intolerable terms. Reviewing high volumes of repetitive information to find anomalies is a difficult task. So the track changes feature is only as sharp and effective as the contract author or reviewer running the app or partaking in the contract redlining process.

On the other hand, a contract review bot will happily scan through as many Microsoft Word or Adobe PDF contracts as you feed it. Partner the contract review bot with an experienced human contract manager to train it to redline. Your contract management team can then decide how to approach each redline-flagged item during negotiations.


Every employee involved in your contract lifecycle management (CLM) does their best to mitigate the company’s risk, maximize profitability, and renew as many agreements as possible. But contract review bots can do much of the same work – and more. They are:

  • Trained with realistic and detailed contract templates
  • Run in a secure, scalable, and reliable cloud environment
  • Fed a regular diet of well-written contracts
  • Kept company by a human reviewer that can teach it what to do when faced with complex terms
  • Recognized for the benefits and ROI

Training a virtual contract review bot is probably a lot like training a dragon. So if you keep it fed and exercised, you couldn’t ask for a better protector of your wealth and intellectual capital. But if you neglect it or teach it bad habits, you’re going to get burned

3. ALLOW CONTRACT NEGOTIATIONS TO RUN THEIR NATURAL COURSE – DON’T RUSH Review, redlining and negotiation are all fundamental elements of the contracting process

Just because your document review processes are efficient and effective – accelerated through automation – you can’t expect every business that you work with to have the same advantage. So don’t rush the end-to-end contract process and put undue pressure on the other party. The redlining and negotiation process sets the tone for how a business relationship will unfold.

A recent Business News Daily article about negotiation tactics states that strategic negotiation pauses can maintain perspective and ease tension.

Ultimately, the contract redlining and negotiation process can set the tone for business relationships going forward. Trying to rush another party’s contract review makes for a rocky start to the business relationship if it doesn’t force them away from the negotiating table altogether.


Thorough review, redlining, and negotiation are all fundamental elements of contracting. But representation from legal, finance, sales, and operations should really be limited to those who are necessary to the process. Just as too many chefs can spoil a broth, too many reviewers can derail a contract or business relationship.

Fortunately, automating initial contract review – with a well-trained AI algorithm – can reduce the number of phone calls, emails, and vendor-portal instant messages questioning terms, and conditions. And an integrated contract management suite, with seamless authoring, storage, review, document comparison, and eSignature functionality, makes for a better sell-side or buy-side agreement process.

So are you looking for ways to improve your contract negotiating strategies – beyond the best practices for contract redlining? Contact the ContractPodAi today for a pressure-free assessment of your own contract management.


 Deirdre Leone
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