Contract Redlining with PDiff
What is contract redlining?
Contract redlining (in legal practice) is the process of reviewing, marking up, and revising a contract to reflect negotiated changes, flag risks, and align the document with a client’s legal and business positions.
The term redlining derives from the classic practice of correcting draft contracts on paper with a red pen.
Think of it as the lawyer’s way of saying:
Yes, but — only if we change these parts.
What contract redlining involves (for lawyers)
In practice, redlining usually includes:
- Tracking changes (insertions, deletions, comments) so both sides can see exactly what’s being proposed
- Risk spotting: identifying clauses that are unfavorable, ambiguous, or non-standard
- Negotiation signaling: showing what’s acceptable, what’s not, and where compromise might land
- Version control: managing multiple drafts without losing context
- Consistency checks: making sure definitions, cross-references, and obligations align across the document
Common clauses lawyers redline heavily:
- Indemnities
- Limitation of liability
- Termination rights
- Governing law and venue
- Payment terms
- Intellectual property (IP) ownership
- Confidentiality and data protection
Where comparison software comes in
Contract comparison (or document comparison) software automatically compares two or more versions of a contract and highlights differences — far faster and more reliably than manual review.
How PDiff helps legal professionals
-
Speeds up redlining
Instead of eyeballing two 50-page agreements:
- The software instantly highlights every change
- Lawyers focus on judgment, not hunting for edits
-
Reduces risk of missed changes
Manual comparison is error-prone, especially when:
- Changes are subtle (a single word like “may” → “shall”)
- Clauses are reordered
- Definitions are tweaked
Comparison tools catch all textual changes, even tiny ones.
-
Improves negotiation clarity
Clean, accurate comparisons:
- Make it easier to explain changes to clients
- Reduce disputes over “what actually changed
- Build trust with counterparties
-
Handles non-Word formats
With PDiff you can compare different formats:
- PDF ↔ PDF (even scanned documents, with OCR)
- Word ↔ PDF
- Word ↔ Word
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Supports version control & audit trails
PDiff helps you to:
- Track changes, add comments and OK checkmarks including log (who & when)
- Store comparison histories
- Integrate with document management systems
That’s especially valuable in regulated or high-stakes matters.
Redlining vs. comparison software (how they work together)
| Redlining | Comparison software |
|---|---|
| Substantive legal judgment | Mechanical detection of changes |
| Negotiation strategy | Accuracy and speed |
| Requires expertise | Requires computation |
| Answers "Should this change be accepted?" | Answers "What changed?" |
In short, this comparison leads to the following procedure in practice:
Best practice
 |
 |
|
| Let software find the differences | → | Let lawyers decide the outcome |
What users say about PDiff and contract redlining
The thing is we, lawyers, exchange documents in PDF (for instance trial documents) where the changes from a previous version are ONLY indicated with a line in the margin along the paragraph or the section of the paragraph that has been changed. That is, no change in the text itself appears (no sign of deletion or insertion, or otherwise; merely a vertical line in the margin showing that something has been changed). The reason is to keep the document easily readable without a markup in the text.
It is a practice common to lawyers worldwide. The addressee of the document checks the areas where the other party signalled a change and sees what is new or changed to be taken into consideration for his reply.
It would be great. No one does it.
Word has the document comparison function and then you can export to PDF and set preferences so that only the lateral line appears. It works but you cannot number paragraphs and courts ask to number them. When the document includes numbered paragraphs Microsoft somehow keeps the old numbering even though the change was accepted and the document showing the changes is a mess.
Adobe Acrobat does not have this function (comparison of PDFs with changes solely in the lateral bar). The only system that seems to have it is Litera, but you have to take the whole system with AI and plenty of functions that I do not need […]. The price is irrelevant to me, but I do not want to have the whole software and generally speaking I am not fond of Microsoft products (I am on Mac though I have Office 365 (Word, Excel, …) for Mac to exchange with other lawyers).
It’s great to have it in PDiff now!
Best,
(Lawyer from Paris, France)
Bottom line
Contract redlining is a core legal skill involving risk assessment and negotiation. Comparison software doesn’t replace lawyers — it amplifies them, making redlining faster, safer, and more defensible.