Contract Redlining Best Practices For 2025

What Is Contract Redlining?

Contract redlining is the process of reviewing and editing legal documents, usually contracts, between two or more parties. It’s called “redlining” because, back in the day, people used red ink to mark changes.

These days, it’s all done with track changes and comment boxes in Word or whatever software you’re using.

Here’s what usually happens:

• One side sends a contract.
• The other side reviews it, makes changes, and sends it back.
• This ping-pong of edits and comments continues until both parties agree on the terms.

Sounds simple, right? Not exactly. This process can go on for days or even weeks if there’s no structure or if someone drops the ball.

What Are The Challenges of Contract Redlining?

If you’ve been through the contract negotiation process, you already know redlining can be a pain. It’s supposed to help both sides reach a fair deal, but often, it drags things out and causes more confusion than clarity. Here’s why.

• Too many people editing – When multiple people jump in without coordination, changes pile up fast. It’s hard to tell who suggested what, and the whole process gets messy.
• Poor version control – Ever opened a contract document only to realize it’s not the latest one? Yeah, that happens more than it should, especially without proper contract management tools.
• Lack of clear communication – One of the biggest problems is unclear feedback. If the parties involved don’t explain why they’re making changes, misunderstandings follow.
• Legal language overload – Not everyone reviewing a contract is a lawyer. If the edits are packed with legal terms, folks on the business side might miss something important.
• Endless back-and-forth – Without clear deadlines or a process in place, the redlining stage can go on forever, slowing down the entire contract negotiation process.

These issues can turn a simple contract review into a frustrating game of email ping-pong. Luckily, there are ways to fix it.

Maximize Your Contract Redlining Process With Percipient

Redlining shouldn’t slow down deals or create confusion over different versions of the same contract. It should be a clear, collaborative process that helps everyone agree on fair contract terms without wasting time. That’s where Percipient makes a real difference.

By combining AI review with expert legal oversight, Percipient helps you clean up the chaos. You get fast, accurate feedback, support for your existing tools, and a smoother flow that fits right into your business operations. No more guesswork. No more long review cycles.

Ready to stop juggling edits and chasing updates? Let Percipient help you manage contract redlining the smart way.

Schedule a discovery call with Percipient and take control of your contract process today.

Contract Redlining Best Practices You Can Implement Today

Redlining doesn’t have to feel like walking through quicksand. A few smart habits can speed things up, reduce confusion, and keep the contract negotiation process running smoothly. Let’s break down some contract redlining best practices you can start using right now.

1. Start With a Solid Template

Using a well-written, pre-approved contract document saves you from reinventing the wheel every single time. A solid template gives your team a reliable starting point that already includes standard terms, legal language, and formatting everyone agrees on.

This means you’re not wasting time redlining boilerplate sections or rewriting the same clauses in every deal. Instead, you can focus on the parts that actually matter to the parties involved, like pricing, timelines, and service terms.

It also helps maintain consistency across contracts, which makes reviews faster and lowers the chance of missing something.

2. Use Track Changes and Comments—Every Time

Don’t send a contract full of silent edits; nothing causes more confusion during the review process. Always use tracked changes so it’s clear what’s been added, removed, or reworded. This helps everyone, especially legal teams, understand the reasoning behind each update without second-guessing intent.

Comments are just as important. They let you explain why a change was made or ask for clarification without cluttering the contract document itself. If you’re using good contract management software, these features are built right in, making collaboration smoother.

It’s also a key part of any solid contract lifecycle management process: keeping edits organized and traceable from start to finish.

3. Set Roles Before the Redline Begins

Before the contract review process kicks off, make sure everyone knows their role. Decide early who’s in charge of reviewing, who’s allowed to make edits, and who has the final say.

When too many people jump into the redline with no plan, things get messy fast, with conflicting edits, missed updates, and backtracking becoming the norm. Whether you’re working in Microsoft Word or using a redlining tool, defining roles helps keep everyone on the same page.

It also speeds up the path to a final agreement, since there’s less confusion about who’s doing what and when each step is done. 

4. Keep Language Simple When Possible

Legal terms have their place, but don’t overdo it. If something can be said in plain English, say it that way. Overcomplicating things doesn’t make the contract better. It just slows down the entire contract workflow.

When you’re redlining documents, simple language helps everyone understand what’s being proposed without needing a legal dictionary. This is especially important for the parties involved who aren’t lawyers.

Clear language makes it easier to spot issues, respond to proposed changes, and move the process forward without unnecessary back-and-forth.

5. Name Your Files Properly

Avoid naming files “Final_FINAL_v3_USETHISONE.docx.” It only leads to confusion, especially when multiple versions are flying around during the contract process. Use clear, consistent file names like “Contract_ClientName_Date_v3” so everyone knows exactly what they’re looking at.

This small habit saves time and prevents mistakes like editing the wrong version or sending outdated documents. Whether you’re using Word processing software like Microsoft Word or a document editor built into your contract management process, proper file naming keeps things organized and easy to track.

6. Align Internally Before Sending Edits

Nothing slows down a deal like someone from your side saying, “Wait, we didn’t agree to that.” Before you send edits out, take the time to check in with your team. Everyone involved should agree on the changes being proposed; this is key to effective contract redlining.

When teams skip this step, it often leads to confusion, rework, or even lost trust with the other party. Whether you’re using software or doing manual redlining, internal misalignment can throw everything off.

So, before redlining a contract, pause and confirm that everyone on your side is on board with what’s going out the door.

7. Set Editing Deadlines

The contract negotiation process shouldn’t drag on for weeks. Without deadlines, edits sit in inboxes, reviews get delayed, and deals lose momentum. Set realistic review deadlines for each round, especially if you’re working with multiple teams.

For example, a software company might set a 48-hour review window for its in-house legal teams and a 72-hour turnaround from the client side. That way, everyone knows what’s expected and when.

Deadlines help keep the entire process moving and show that you’re serious about reaching a successful negotiation.

It doesn’t have to be rigid, but there needs to be a clear timeline everyone sticks to.

8. Use Contract Redlining Software

Still redlining contracts in email threads or outdated Word files? That slows everything down. Modern contract redlining software makes the contract process smoother, faster, and way less frustrating. You get:

• Real-time version tracking
• Role-based editing access
• Built-in comment threads
• Fewer errors and faster approvals

Services like Percipient go a step further. They blend AI with human legal review to speed up redlining without losing quality. First, their AI reviews the original document, flags issues, and suggests edits. Then, real legal experts step in to check and validate everything.

The result? Clear contract redlines, consistent standards, and quick turnarounds.

Percipient also helps with maintaining compliance and makes it easy to push contract data to your contract management software. It works with tools you already use, like Google Docs or Word, and supports your in-house legal teams throughout the entire process.

FAQs About Contract Redlining Best Practices

How to properly redline a contract?

Contract redlining refers to the process of reviewing, editing, and negotiating terms in a contract. To do it properly, start with a clean draft and use tracked changes to show edits clearly. Add comments when you need to explain why a change was made. Make sure only approved team members are editing the same document to avoid version control issues. Using a platform where software automates version tracking and collaboration brings numerous benefits, especially for in-house counsel and legal professionals managing high volumes.

What is redlining in contract management?

In contract management, redlining is the step where contract terms are reviewed and negotiated by different parties. It’s often handled by a law firm or in-house counsel and plays a key role in protecting the company’s interests. It includes adding, deleting, or changing clauses, usually with comments, before reaching a final agreement.

How to properly redline?

Always establish clear objectives before you begin. Decide who will edit, review, and approve the contract. Use software that tracks changes and offers seamless integration with tools like Word or Google Docs. This keeps the process smooth and avoids confusion over different versions.

How do I redline a lease agreement?

Redlining a lease agreement works the same way as other contracts. Review the contract terms, make tracked edits, and leave comments to suggest updates. If you’re part of a law firm or working as in-house counsel, redlining software can help maintain accuracy, speed up reviews, and reduce back-and-forth. Always confirm edits with the other party before finalizing.