Redlines

Negotiation can change a clause one sentence at a time. A redline belongs to a contract and a specific contract clause. It records whether the change inserts, deletes or modifies text; the original and proposed wording; who proposed it; and its current resolution status. This gives Legal Counsel a focused place to inspect what the counterparty or an internal colleague is asking to change.

An open redline is still a request. Accepted, rejected and counter proposed are distinct outcomes. Legal Counsel can record when the item was resolved and add a resolution note so the next reviewer understands the reason. The Contract Manager can then check the current clause text against the decided redline before moving the agreement toward approval.

• Clause context. Every redline links to the contract clause it changes and to the parent agreement.
• Proposal record. Change type, original text and proposed text show the issue under discussion.
• Decision record. Status, resolution date and note show how the issue was handled.

The proposal source distinguishes internal sales, internal legal and counterparty changes. That distinction helps a reviewer understand who raised the issue, but it does not decide whether the text is acceptable. Legal Counsel should compare the wording and the contract’s commercial context before recording the outcome.

Agree who may raise a redline, who may resolve it and what happens when an item is counter proposed. Decide how the clause’s current text is updated after acceptance so the agreement and the redline tell the same story. Define when a contract can leave legal review: for example, the reviewer may require every open item to be addressed before approval routing. Keep the decision notes concise enough that another reviewer can understand them without reopening email threads.

A counterparty asks to modify the limitation of liability clause in an MSA. The Contract Manager records the proposed text against the affected contract clause and marks the redline open. Legal Counsel compares that proposal with the current contract text and the standard library clause. Counsel counter proposes alternate wording and notes the reason. After the parties agree, counsel records the accepted outcome and checks the clause text. The approval step can then be evaluated against the wording the parties actually intend to sign.

• Open redlines — Work through unresolved and counter proposed clause changes.
• Contracts in review — Find the parent agreement awaiting legal review.

See redline resolution for the change decision and approval and execution for the next handoff.