Dinn, Hochman & Potter, LLC

How do I red-line a contract?

You would never enter a serious business arrangement without the protection of a contract. And when it comes to written agreements, the devil is in the details and it is critical to make sure that you thoroughly understand all of the terms of a contract and that those terms are to your benefit. This means that once a contract is drafted, you want to go over it very carefully and make any necessary changes.

There are a number of things that can help you effectively edit, or "red-line" a contract. First, remember that you must inform the other party of any changes you make to a contract. But this can be easily done using MS Word and employing its "Track Changes" function. Using this feature will produce a document that clearly shows the changes you made. Additionally, you can add comments that explain the reasons for the changes.

Remember, that red-lining is part of the negotiation process and it is important to keep the lines of communication open with the other party. This is especially true if you are proposing a serious change. When such is the case, it is best to pick up the phone and talk directly to the other party. By doing this, you create a cooperative environment based on mutual respect.

But even if you red-line a contract, it can still be easy to miss something critical or misinterpret the wording of the terms. Such mistakes can all too easily lead to contract disputes down the line. This is why it can be so helpful to have a business law attorney go over the contract before you sign it. An attorney can help make sure that you are getting the terms you want. And, if the other party should later breach the contract, the attorney could act on your behalf to resolve the dispute.

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