When reviewing and responding to contract redlines, the reviewer has three choices: 1) accept the redlines, 2) reject the redlines, and 3) counter (or negotiate) the redlines.
We already covered how to accept redlines the right way in a previous post. Here, we will cover how to reject redlines the right way and avoid disappearing redlines. Disappearing redlines are spooky 👻 and inefficient. Most people don’t even know they’re doing it. They just don’t know any other way. Until now…
My name is Nada Alnajafi. I’m a seasoned in-house attorney, blogger, author, and speaker who loves working with, talking about, and writing about contracts. And I’m determined to transform the way us lawyers and contracts professionals redline contracts for the better.
In this newsletter, I’m going to show you how to master MS Word’s Track Changes features which will lead to faster contract reviews, less back-and-forth, more enjoyment of your work, and greater negotiation leverage.
In order to combat the transparency problem that is rampant in our profession, we need to make sure that every move we make to alter the contract is visible to the other party.
To reject a redline, most people click the Reject button in the Track Changes menu. I’ll explain why that’s not a recommended approach.
Clicking the Reject button causes “disappearing redlines” because it reverts the text back to the original without any trace that a change was just made to the contract. Poof! Gone! The other party may not notice that you rejected it unless they run a document compare or conduct side-by-side review. What’s worse is, they’ll probably assume that you accepted the redline. This can seem misleading and result in distrust.
For example, let’s say a counterparty proposes the redlines show below.
The contract reviewer accepts most of it, but does not want to agree to California governing law. So they click the Reject button and the language reverts back to the original Delaware governing law. Like this:
If the other party were to glance at this Jurisdiction clause, they would initially assume that all of their proposed redlines were accepted. But upon closer look, we can see that it was not.
Here’s what to do instead of using the Reject button.
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Instead of the Reject Button, Do This…
There’s an easy way to say no to a proposed redline while fostering collaboration and transparency. Instead of using the Reject button, do this:
1. Strike your counterparty’s redlines using the backspace button.
2. Insert new redlines reflecting the original terms that you want to revert back to.
3. Provide an explanatory comment explaining your reason for declining their changes.
Nada Alnajafi is the Founder of Contract Nerds, Author of Contract Redlining Etiquette, and a seasoned in-house attorney. She is a contracts expert with 15+ years working in-house counsel for companies of all sizes and across various industries.