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Redlining As a Creative Tool For Drafting Contracts


March 1, 2021

Redlining contract drafts during negotiations builds confidence between negotiating partners because it eliminates uncertainties about whether other parties have changed the original terms. Including comments by in-house counsel helps as well, by addressing problems caused by vague or poorly articulated terms. It can justify your position on a particular change before in- person meetings to finalize the contract. If you receive a redlined document, look for seek patterns in the terms and conditions annotated by the other party. It can elucidate what aspects of the agreement concern them. Note highlighted terms that you cannot budge on to comply with industry-specific, local, or national laws. It may protect your company’s intellectual property, or prevent an unacceptable legal or financial risk. After that, choose what clauses you are willing to concede on to earn some goodwill. Redlining is more than a tool for revision. It is a way to better understand a potential partner and form the basis of a long-term business relationship.

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