The editing of a contract where two or more parties are negotiating the
terms together
encompasses the concept of
“Redlining”. The main aim of redlining a contract is to arrive at a single
document that
appeases all the parties
involved.
‘Redlining’ finds its origin in the manual marking and editing of
contracts, which involve
hard copy
drafts and red
markers. Parties involved in the negotiations would take the hard document
and mark
the
terms or words
that call the
other party’s attention with red ink, thus 'Redlining Contracts' became a
regular
practice
in contract
management.
The pointers and remarks made in red ink would make it easier to spot the
exact points
where
negotiations were required
or changes were proposed. Once the process of redlining and negotiations
goes through,
the final
outcome
is one final
version of a contract - a clean document agreed upon by all.
With the digital age setting upon the market, and being propelled by the
on-set of the
global
pandemic,
the process of
contract
management has become much simpler. The legal teams are adopting and
migrating
to
cloud-based
platforms for
creating agile workflows and cutting out the physical copy traditions with
digital
contracts for
minimizing version
creation.
How does redlining work?
When we try to analyze the concept of redlining, the very basic
understanding is that
it means marking and editing
points in a contract that need to be re-negotiated. However, it is more than
that - the
process
of
redlining a contract
is a step towards a collaborative effort by every party involved to arrive
at such terms
in a
contractual relationship
that satisfies everyone involved.
Previously all of these exchanges were carried out manually, but with the
onset of
technology,
it has
become easy to
fast-track these processes. With the agility that cloud-based contract
management
software has
brought,
the
collaborations have become more effective and are producing better and much
more
accurate output
in
contract
negotiations.
Do you need to redline contracts?
If you deal with contracts that involve more than one person working on the
terms of the
agreement to arrive at a final
version, you surely need to redline the contracts. This process of contract
negotiation
and management is more
profoundly required with multiple group collaborations when a lot of
redlining happens
over terms of contracts, in
creation as well as renewals. Redlining has been proven as an effective
strategy to use
with the increase in the
contracting base of the firm. It is very easy to get overwhelmed by the
number of
features and integrations that a
modern redlining tool can offer.
Pro Tip: We strongly suggest that you select that configurable CLM which
offers you
limitless possibilities to design
your redlining the way you want.
What are the challenges to redlining contracts?
Any new technology is not easy to implement - it has its own set of
challenges. With a
misfit tool, redlining can also
become an equal mess of piled-up agreements. Here is a list of a few
challenges that are
quite eminent in redlining.
How can you effectively manage contract redlining?
Contract redlining includes dozens of revisions done in a single contract.
Your legal
department needs to record, track
and analyze all of these changes and then work with the parties to arrive at
satisfactory terms.
Empowering your legal team with the right solution to ease out their
work is
something that every business should care
about.
The fastest way to redline a contract is that all the parties involved in it
work
together on a
single
integrated
platform. The Covid-19 pandemic has shown us that it may not always be
possible to
hold negotiations in
person, however
it is always possible to hold them online.
By integrating a cloud-based CLM with an in-built redlining editor, every
person on
board
can review,
edit and rework
the terms of negotiations simultaneously and in real-time. This is the
change that
is soon
going to hold
a very
important place in contract management and RazorSign is poised to be the
torchbearer
for this
change bringing its
world-class CLM at
your
disposal.
Benefits of Modern Contract Redlining Tools Modern contract redlining tools
have
revolutionized how legal teams approach
contract management. These tools enhance accuracy, streamline workflows, and
save time,
which is crucial for legal
professionals handling numerous contracts daily
LegalOn's legal AI software stands out in this
regard. It offers
an AI-driven solution that significantly enhances the
accuracy and efficiency of contract reviews. By integrating LegalOn's
technology, legal
teams can automate complex
redlining tasks, ensuring more precise and faster contract negotiations.
This modern
approach not only saves time but
also reduces the risk of human error, making it a valuable asset for any
legal
department dealing with extensive
contract management.
RazorSign
