Contract Redlining Software: Tools That Actually Produce Track Changes

What Contract Redlining Software Should Do

True redlining software takes a contract and produces a marked-up version showing proposed changes:

Input: vendor_agreement.docx (clean)
Output: vendor_agreement_redlined.docx (with track changes)

When you open the output in Word:

• Deleted text appears struck through
• Inserted text appears in a different color
• Changes are attributed to an author
• You can accept or reject each change individually

That's redlining. Anything else is contract review with extra steps.

The Market Reality

Most "contract redlining software" doesn't actually redline. Here's what they do:

Category 1: Issue Identification

Output: PDF report listing issues

"Section 3.2: Indemnification is one-sided. Consider mutual indemnification."
"Section 5.1: Liability is unlimited. Industry standard is capped."
"Section 8.4: Auto-renewal clause may be undesirable."

You read the report. You open Word. You make the changes manually.

Category 2: Suggested Language

Output: Chat interface or panel with suggestions

"For Section 3.2, consider:
'Each party shall indemnify the other for claims arising from
its own negligence or willful misconduct...'"

Better—you get specific language. But you still copy-paste into Word and format track changes yourself.

Category 3: Side-by-Side Comparison

Output: Split view showing your standard vs incoming contract

Your standard | Incoming contract
Net 30        | Net 60
Mutual indem  | One-sided indem
$1M cap       | Unlimited

Helpful for identifying differences. Doesn't produce a marked-up document.

Category 4: Actual Redlining

Output: DOCX file with tracked changes

Open in Word → See insertions/deletions → Accept/reject → Send to counterparty

This is what redlining should be. This is what most tools don't deliver.

Why Real Track Changes Are Hard

Track changes in Word aren't formatting. They're specific XML structures embedded in the document:

<w:p>
  <w:r>
    <w:t>Payment terms: </w:t>
  </w:r>
  <w:del w:id="1" w:author="Contract Review" w:date="2026-02-02T10:00:00Z">
    <w:r>
      <w:delText>Net 60</w:delText>
    </w:r>
  </w:del>
  <w:ins w:id="2" w:author="Contract Review" w:date="2026-02-02T10:00:00Z">
    <w:r>
      <w:t>Net 30</w:t>
    </w:r>
  </w:ins>
</w:p>

To produce this, software must:

1. Parse the OOXML document structure
2. Locate exact positions for changes
3. Wrap deletions in <w:del> elements
4. Wrap insertions in <w:ins> elements
5. Maintain all other document formatting
6. Preserve existing track changes if present
7. Register the author in document settings

Most AI and contract tools work with text, not document structure. They extract text, process it, and generate text output. The OOXML manipulation required for track changes is a separate engineering challenge.

Contract Redlining Tools Compared

Tools That Actually Redline

Spellbook

• Word add-in for legal
• Produces real track changes
• Playbook-based review
• Legal-specific training
• Premium pricing ($$$)

DocMods

• Direct DOCX manipulation
• Full track changes output
• API-first (programmable)
• Cross-industry use
• Developer-friendly ($)

Litera (formerly Workshare)

• Document comparison focus
• Creates redlined comparison documents
• Enterprise integration
• Established in legal market ($$)

Tools That Review (Not Redline)

Kira Systems

• Excellent clause extraction
• Due diligence strength
• Outputs reports, not markups
• Requires manual implementation

Luminance

• AI contract analysis
• Issue identification
• Produces analysis, not redlines
• Good for review workflows

Evisort

• Contract management platform
• AI-powered analysis
• Extraction and insights
• Not a redlining tool

Tools in the Middle

Ironclad

• CLM platform
• Some editing capabilities
• Track changes support varies
• Best within Ironclad ecosystem

DocuSign CLM

• Contract lifecycle management
• Collaborative editing
• Limited AI redlining
• Strong workflow features

Evaluating Redlining Software

The Simple Test

1. Upload a contract
2. Ask for changes to specific terms
3. Download the output
4. Open in Word

Pass criteria:

• Track Changes visible immediately
• Can accept/reject individual changes
• Author attribution on changes
• Document formatting preserved

Questions to Ask Vendors

On output:

• "Does your tool produce DOCX files with track changes?"
• "If I open the output in Word, will I see insertions and deletions?"
• "Can you show me a sample output file?"

On attribution:

• "What author name appears on the track changes?"
• "Can I customize the author name?"
• "Are timestamps accurate?"

On preservation:

• "If the input has existing track changes, are they preserved?"
• "Does the output maintain document formatting (styles, headers, TOC)?"
• "What happens to comments in the source document?"

Red Flags

• "We produce a summary of recommended changes"
• "Our suggestions can be copied into your document"
• "You'll review our analysis and make the updates"
• Demo only shows comparison view, not actual redlined document
• Can't provide sample DOCX output

Building Redlining Workflows

Single Contract Review

from docxagent import DocxClient

def redline_against_playbook(contract_path, playbook):
    client = DocxClient()
    doc_id = client.upload(contract_path)

    client.edit(
        doc_id,
        f"""Review this contract against our standards and make tracked changes:

        {playbook}

        For each issue:
        1. Delete problematic language
        2. Insert corrected language
        3. All changes must be tracked

        Do not add comments—only make the edits.""",
        author="Playbook Review"
    )

    return client.download(doc_id, contract_path.replace('.docx', '_redlined.docx'))

# Usage
playbook = """
Standard terms:
- Payment: Net 30
- Liability: Capped at 12 months fees
- Indemnification: Mutual for IP and confidentiality
- Termination: 30 days written notice
- Governing law: Delaware
"""

redline_against_playbook("incoming_vendor_agreement.docx", playbook)

Batch Processing

def batch_redline(contracts_folder, playbook, output_folder):
    client = DocxClient()
    import os

    for filename in os.listdir(contracts_folder):
        if not filename.endswith('.docx'):
            continue

        input_path = os.path.join(contracts_folder, filename)
        output_path = os.path.join(output_folder, filename)

        doc_id = client.upload(input_path)
        client.edit(
            doc_id,
            f"Review against playbook and redline:\n{playbook}",
            author="Batch Review"
        )
        client.download(doc_id, output_path)

# Due diligence: process 50 contracts
batch_redline(
    "/acquisition/target_contracts",
    playbook,
    "/acquisition/redlined_contracts"
)

Integration with CLM

def clm_redline_workflow(contract_id, clm_api):
    # 1. Get contract from CLM
    contract_data = clm_api.get_contract(contract_id)
    contract_path = clm_api.download_document(contract_id)

    # 2. Get applicable playbook
    playbook = clm_api.get_playbook(contract_data['contract_type'])

    # 3. AI redlining
    client = DocxClient()
    doc_id = client.upload(contract_path)
    client.edit(doc_id, f"Apply playbook:\n{playbook}", author="CLM AI Review")

    redlined_path = contract_path.replace('.docx', '_redlined.docx')
    client.download(doc_id, redlined_path)

    # 4. Upload back to CLM
    clm_api.upload_version(contract_id, redlined_path, "AI Redlined")

    # 5. Route for human review
    clm_api.route_for_review(contract_id, reviewer="legal_team")

Cost-Benefit Analysis

Manual Redlining

Average contract: 40 pages
Review and redline time: 3 hours
Loaded cost: $150/hour (attorney time)
Cost per contract: $450

Annual volume: 200 contracts
Annual cost: $90,000

Software-Assisted Redlining

Tool cost: $20,000/year
Time per contract: 1 hour (review AI output + adjustments)
Cost per contract: $150 (time) + $100 (tool allocation) = $250

Annual volume: 200 contracts
Annual cost: $50,000 (time) + $20,000 (tool) = $70,000

Savings: $20,000/year
ROI: Positive in year 1

Beyond Direct Savings

• Faster turnaround: Days instead of weeks
• Consistency: Same playbook applied every time
• Reduced risk: AI doesn't miss clauses
• Scalability: Handle volume spikes without additional headcount

The Bottom Line

Contract redlining software should redline contracts—producing actual track changes you can accept, reject, and send to counterparties.

Most tools in the market are review tools calling themselves redlining tools. They identify issues. You implement the changes.

Before buying:

1. Request sample output
2. Open it in Word
3. Verify track changes are present
4. Check author attribution
5. Test with your actual contracts

True redlining automation exists. It's just rarer than the marketing suggests. Choose tools that do the full job, not tools that do 80% and leave the hard part to you.