No matter what a person is dealing with or what their profession is, one thing all sectors have in common is CONTRACTS! A contract is a mutually binding agreement between two or more parties that states the rules and regulations, code of conduct, the relationship, and the limitations of each party involved in the agreement. A contract is based totally on the aspect that all the parties are getting what they want. Whether it’s materialistic or services, parties involved in a contract had to be satisfied for it to come into being.

But how exactly do we achieve mutual satisfaction? Does it occur naturally? The answer is: NO! A lot of work and effort in all different stages are involved in order to achieve mutual satisfaction. In short what goes behind a happy agreement is contract redlining and negotiation, contract management, contract administration, and a lot more than just an exchange of thoughts.

In this blog, we’ll focus on contract redlining.

Starting from the start, what does contract redlining actually mean?

While negotiating the terms of a contract, both parties have their own rules, codes, and points of view. Obviously, the parties want maximum profit out of the contract and therefore will want to mend the agreement accordingly. Negotiating is a complex procedure. It involves having proper reviewing of the contract, being a little flexible, and a lot more convincing. There’s no doubt that if you are good at convincing, you will gain more than the other party, i.e. you will have an upper hand in the agreement.

During contract negotiation, the agreement is sent back and forth between the parties. The parties involved, review the contract and mark what they want to change, cross out or add words in the document, and send it back and forth. This is called contract redlining.

Now traditionally, this was all done with red ink, and the document was sent to-and-fro, physically. When everyone agreed on one version, a clean document was framed which became the final agreement. This would consume a whole lot of time and effort.

Today, the procedure is simplified enough that cloud-based contract management allows you to perform contract redlining in real time. This means one no longer needs to worry about physically delivering the contract. This helps in speeding the process by days or sometimes even by weeks.

Throughout the whole process of management, contract redlining comes during negotiation.

how to perform contract redlining like a pro!

Tired of getting stuck in awkward situations during negotiations? Like a situation where one is not sure what their client wants, or the time when there are uncertainties if the other party changed their terms or not? We have a rescue. Follow these tips for next time, there may not be the next time!

add comments along with redlines:

Contract redlining can sometimes be confusing, especially if the contract’s language is complex. When a party simply strikes out a sentence or a word without explanation, it just makes understanding the contract more difficult and complicated. Adding comments along with the redlines will simplify the confusion and provide a better explanation. Sometimes, the party straight away accepts the changes without even organizing a meeting if comments are properly added.

stick to the pattern

When a contract is drafted, it is drafted keeping in mind the language, the pattern, the tone, and the theme should be the same throughout the whole document. When one starts with negotiating, during contract redlining, parties tend to send the document back and forth. As a lawyer, it’s my duty to maintain the decorum of the document. Along with editing the terms, if one changes the pattern or theme of the contract, the whole process might be disturbed and sometimes it can create a lot of confusion.

Moreover, it does not look very professional and might end up losing leverage.

know the contract redlining software

The biggest mistake a lawyer makes is not having complete information about the software before using it. Sure, one can find attractive features in every software but before making a commitment to one, lawyers need to have full knowledge of its features and limitations. One cannot just start using software and switch to another one whenever they feel like it. Before the start of using the contract redlining software, figure out if it offers the features that are required by the firm and at what cost. No one wants to invest in software that is ridiculously expensive. Initially start with a trial version, this way it can be easy to choose the right software.

try to keep it as simple as possible

When one receives a newly drafted contract, sometimes there might be a lot of things that bother them, and sometimes only a few. Make sure not to create a mess. Try and go slow and ensure that the redlining is not overlapping. It can create confusion and might lead to misunderstanding. Always try to simplify the process as much as possible. A contract draws more attention if there are only a few changes. Fewer changes mean less work and that means fewer headaches. The best is to initially draft a contract that needs only a few changes.

One can do that by keeping in mind the requirements of both parties and the demands of both parties and building a contract that can provide maximum to the parties involved. If there are a lot of changes to be made, prefer to edit the document in physical mode by arranging a meeting with the other party.

communication is the key!

This phrase is not just a few words put together, but if applied in real life can solve many bigger issues. Contract redlining, as simple and easy as it sounds, is a far more complex and sometimes frustrating process. But, if one is communicating generously they might find a solution without much hassle. I mean, we all know being a lawyer means a heavy workload, and above all nobody wants to tackle tantrums from the parties they are getting into bed with.

More communication leads to better understanding which not only results in good clientele relationships but also hassle-free contract redlining. Moreover, try not to be a headache and keep an open mind to sacrifice a few needs in order to achieve more. Obviously, one will have to look out for themselves and their firm first, so if the contract is still offering profit to the firm, what is the harm? The least can do is not to be stubborn.

try not to make grammatical errors

First of all, grammatical errors are unattractive and not professional. No matter how generous one is, as long as they make grammatical errors they will not be taken seriously. Not only can create confusion and misunderstanding but it can also rupture the business. Know where and how to use punctuation. Try using nouns and conjunctions carefully focusing on what the contract is demanding.

“Grammar is the greatest joy in life, don’t you find?”

Lemony Snicket, The Wide Window

outsource the work

If one finds themselves too involved in the operating activities they are not able to perform contract negotiation properly. Try outsourcing the legal sector. I mean any division can be outsourced. Outsourcing will not only help to ease the workload but will also increase the effectiveness of the legal division. Try to opt for this at an early stage so that the outsourced legal team has a grasp over everything and performs redlining more effectively.

Moreover, if there are a lot of controversies and negotiation seems to be impossible, be prepared to walk away. Don’t engage in something that brings in more losses than profits. The firm is the priority.

DO’S and DON’TS In Contract Redlining

One might find themselves in situations where they don’t know what to do or where to head to. Being a professional, one doesn’t want to do anything that will harm the firm or its reputation. There are many problems that occur during contract redlining and negotiation.

One thing a lawyer is popular for is their ability to solve problems. Moreover, if someone is good at tackling problems, there is nothing to stop them from having leverage in any deal. They might just win themself a trophy!

Here is a list of do’s and don’ts to keep in mind while contract redlining in order to achieve awkward or difficult situations.

Do’s

• Track changes
• Use correct software
• Minimize risks beforehand
• Review the contract precisely
• Try to make fewer changes
• Use a cloud-based system for contract negotiation
• Communicate even the smallest detail
• Check your facts before negotiating

Don’ts

• Use email for sending revised versions
• Create a mess by overlapping
• Work with unsuited software
• Ignore small details
• Be stubborn and not considerate
• Get your emotions involved
• Change themes or patterns

Summary

• Contract redlining is a part of the negotiation. It means sending a contract back and forth with various edits until you build a document that satisfies both parties.
• Contract redlining is crucial in order to achieve profitable relationships and increase the effectiveness of the firm.
• Just like anything else, contract redlining needs to be done keeping in mind various rules and sets of instructions.
• Tracking changes and communication is an important aspect of contract negotiations.
• Before one starts redlining, review the contract and do not leave out even the smallest details.
• Contract redlining is a complex process and it need not be successful every time. Sometimes, it may lead to unsatisfied contracts. In such a case, be prepared to walk away.