Contract Markup: The Negotiation Language Lawyers Actually Use

The Terminology Problem

Legal professionals throw around terms like "redline," "blackline," "markup," and "strikethrough" as if they're interchangeable. They're not—or at least, they weren't.

Understanding the distinctions helps you communicate clearly in negotiations and avoid misunderstandings that delay deals.

Historical Definitions

Redline

Originally, a redline document showed proposed changes to a draft:

• Deletions: Red strikethrough
• Insertions: Red underline (or blue underline)
• The "red line" was literally the red ink marking changes

A redline is a negotiating document—it says "here's what I want to change."

Blackline

A blackline document showed differences between two versions without indicating authorship:

• Generated by comparing Version A to Version B
• Shows what changed, not who changed it
• Used for quality control and version tracking

A blackline is a comparison document—it says "here's what's different."

Markup

General term for any annotations on a document:

• Can include changes, comments, highlights
• Broader than redline (includes non-change annotations)
• Used casually to mean "edited document"

Modern Reality

Today, these terms are often used interchangeably. When someone says "send me the redline," they usually mean "send me the document with track changes showing what you modified."

Best practice: If there's any ambiguity, ask: "Do you want to see my proposed changes shown in track changes?"

Markup Conventions

Standard Change Marking

Most legal practitioners follow these conventions:

Comment Conventions

Comments typically appear in the margin (Word's comment bubbles) or inline in brackets:

The payment terms shall be Net 30 [Buyer Note: Can we extend to Net 45?]
days from invoice date.

Inline comments work better for short notes. Margin comments work better for longer explanations.

Emphasis Conventions

Some practitioners use:

• ALL CAPS for defined terms or strong emphasis
• [Square brackets] for definitions or optional language
• Italics for document references or emphasis
• Bold for section headers or critical terms

These vary by firm and practice area. Match the style of the document you're editing.

The Markup Workflow

Standard Two-Party Negotiation

Round 1: Initial Draft

Party A sends clean first draft → "Clean" v1.0

Round 2: First Markup

Party B marks up v1.0 → "Marked" v1.1
Party B also sends → "Clean" v1.1 (changes accepted)

Round 3: Response

Party A reviews B's markup
Party A accepts some changes, rejects others, adds new changes
Party A sends → "Marked" v1.2 against v1.1
Party A sends → "Clean" v1.2

Continues until parties agree.

Version Numbering

Clear version naming prevents confusion:

The "marked_to_v1.1" format clearly indicates the base version for comparison.

Multi-Party Negotiations

With more than two parties, complexity increases:

Option A: Sequential Rounds

Party A sends v1.0
Party B marks up → v1.1
Party C marks up v1.1 → v1.2
Party A reviews v1.2, responds → v1.3
Repeat

This is slow but maintains clear lineage.

Option B: Parallel Review with Merge

Party A sends v1.0
Party B marks up → v1.0-B
Party C marks up → v1.0-C
Party A reconciles both → v1.1

Faster but requires careful merge work.

Option C: Single Shared Document

All parties edit the same document (via SharePoint, Google Docs, etc.) with author identification.

Fast but can be chaotic. Works better for simple documents.

Turn Management in Complex Deals

Large transactions need turn management—who has the document when.

Turn Sheet Example

Date       | Document | From | To   | Notes
-----------|----------|------|------|-------
Jan 15     | SPA v1.0 | Seller | Buyer | Initial draft
Jan 18     | SPA v1.1 | Buyer | Seller | Buyer's markup
Jan 22     | SPA v1.2 | Seller | Buyer | Seller response
Jan 24     | Disclosure Schedules v1.0 | Seller | Buyer | First draft
Jan 25     | SPA v1.3 | Buyer | Seller | Comments on v1.2
Jan 26     | SPA v1.4 | Seller | Buyer | Final seller position
Jan 26     | DS v1.1 | Buyer | Seller | Buyer markup

Track who has the "pen" (current editing rights) for each document.

Turn Rules

1. One party edits at a time - Don't work on a document while the other party has the turn
2. Clear handoff - Email explicitly: "Attached is our markup of the SPA. Ball is in your court."
3. Accept or explicitly reject - Don't silently remove the other party's changes
4. Comments explain rejections - If you reject a change, say why

Digital Markup Best Practices

Word Track Changes Settings

Configure Track Changes for clear markup:

1. Review → Track Changes → Change Tracking Options

   • Insertions: Underline, Color: By author
   • Deletions: Strikethrough, Color: By author
   • Changed lines: Outside border

2. Review → Show Markup

   • Enable: Comments, Insertions and Deletions
   • Consider disabling: Formatting (can be noisy)

3. Author Identification

   • File → Options → General → User name
   • Set to your full name (not initials)

Handling "Dirty" Documents

Sometimes you receive a document with:

• Hidden track changes (not visible but present)
• Unaccepted changes from previous rounds
• Multiple author attributions from past negotiations

Clean it up:

1. Accept all changes first (if appropriate)

   • Review → Accept → Accept All Changes

2. Run Document Inspector

   • File → Check for Issues → Inspect Document
   • Remove hidden content if desired

3. Start fresh track changes

   • Enable Track Changes
   • Begin your markup

Comparing Without Track Changes

If you receive a "clean" document but need to see what changed from a previous version:

1. Review → Compare → Compare Documents
2. Select original and revised documents
3. Word generates a comparison showing all differences

This creates a "blackline" comparison document.

Practice Area Conventions

M&A Transactions

• Extensive use of defined terms (capitalized)
• Disclosure schedules referenced by section number
• Heavy markup on representations and warranties
• Indemnification provisions are battlegrounds
• Multiple exhibits with separate version tracking

Real Estate

• Legal descriptions must be precise
• Survey and title references
• Exhibit attachments for floor plans, site plans
• Tenant estoppels with form language

Employment Agreements

• Non-compete and non-solicit provisions heavily negotiated
• Severance calculations
• Change in control provisions
• Equity treatment

Technology/IP

• Definition of "Confidential Information"
• IP ownership provisions
• Source code escrow
• Audit rights

Each area has its own conventions. Match the style of similar deals in that practice area.

Common Markup Mistakes

1. Accepting Changes Then Remarking

Problem: You accept the other party's change, then make a new change in the same spot. Now it looks like you proposed the entire change.

Solution: Reject their change and make yours. Or accept and add a comment explaining.

2. Losing Track of Who Proposed What

Problem: After several rounds, no one remembers the original change authorship.

Solution: Maintain a comparison to the original (v1.0) in addition to the previous round.

3. Conflicting Changes in Same Sentence

Problem: Your change affects text they also changed. The merged result is garbled.

Solution: Careful review of all changes in the same paragraph. May need to manually reconcile.

4. Hidden Metadata

Problem: Your document contains tracked changes, comments, or author info you didn't intend to share.

Solution: Run Document Inspector before sending. Review in "Final" view before sending.

5. Formatting Markup Noise

Problem: Track Changes shows thousands of formatting changes (spacing, fonts) obscuring substantive edits.

Solution: Disable formatting tracking, or use "Show Markup" to hide formatting changes during review.

AI-Assisted Markup

Modern AI tools can accelerate contract markup:

First-Pass Review

from docxagent import DocxClient

client = DocxClient()
doc_id = client.upload("vendor_contract.docx")

# AI markup with standard playbook
client.edit(
    doc_id,
    """Review this vendor agreement against standard procurement terms.
    Mark up with track changes:

    1. Limitation of liability should be mutual, not just vendor-favored
    2. Indemnification should be limited to third-party IP claims
    3. Payment terms should be Net 60 not Net 30
    4. Add standard data protection provisions if missing
    5. Termination for convenience should be mutual with 30 days notice

    Add comments explaining each significant change."""
)

client.download(doc_id, "vendor_contract_reviewed.docx")

Playbook Comparison

# Compare incoming contract to your standard positions
client.edit(
    doc_id,
    """Compare this contract to our standard playbook positions:

    - Indemnification: We accept carve-outs for gross negligence and willful misconduct only
    - Limitation of liability: 12 months of fees, excluding indemnification obligations
    - Insurance: $2M CGL, $5M E&O
    - Data protection: Our DPA must be incorporated

    Identify deviations and propose language that moves toward our positions."""
)

Revision Summary

# Get structured summary of all markup
revisions = client.get_revisions(doc_id)
comments = client.get_comments(doc_id)

print(f"Total changes: {len(revisions)}")
print(f"Total comments: {len(comments)}")

# Group by type
insertions = [r for r in revisions if r['type'] == 'insertion']
deletions = [r for r in revisions if r['type'] == 'deletion']

print(f"Insertions: {len(insertions)}")
print(f"Deletions: {len(deletions)}")

Markup Checklist

Before sending your marked document:

Content:

• All intended changes are tracked
• Comments explain non-obvious changes
• No changes were accidentally accepted
• Changes are internally consistent

Formatting:

• Document Inspector run (no hidden content)
• Author name is correct
• Track Changes view is sensible (not "Final")

Files:

• Marked copy attached
• Clean copy attached
• Version number clear in filename
• Previous versions retained for reference

Communication:

• Cover email summarizes key changes
• Major issues highlighted for discussion
• Timeline/next steps clear

The Bottom Line

Contract markup is a communication tool. The goal isn't perfect formatting—it's making your proposed changes clear to the other party so you can reach agreement.

Key principles:

• Be clear about what you're changing and why
• Be consistent in your conventions within a transaction
• Be transparent about your changes (don't hide edits)
• Be organized with version control and turn management

Whether you call it redlining, blacklining, or markup, the fundamentals are the same: show your changes, explain your reasoning, and keep the negotiation moving toward closing.