Agreeing edits to a contract: what to look at in the new draft

The most expensive mistake in negotiation is to sign a file that is “almost the same” and miss an edit in one paragraph on penalties or unilateral withdrawal. Below is a way to work with a new draft, and a list of areas where edits are often critical.

Why “skimming it” is not enough

• Edits are often pinpoint: one word changes how risk is allocated
• In a PDF or a scan it is hard to see what was added in the middle of a section
• The counterparty may send a clean copy with Word track changes turned off

For two Word files, the built-in comparison sometimes helps — see how to compare two documents in Word. For a PDF, and for a reading by commercial terms, an online comparison is more convenient.

Areas to check first

Price and payment

• The amount, currency, or stage order changed
• A right to change the price unilaterally appeared
• Payment deadlines or advance-payment terms moved

Deadlines and scope

• The deadline was shortened with no change in scope
• “Any additional work” was added with no extra pay
• The acceptance criteria changed

Liability and penalties

• The penalty rose for your side only
• A liability cap appeared for the counterparty
• Compensation for “all losses,” with no limits, was added

Termination and disputes

• Unilateral withdrawal became available to one side only
• The venue / pre-claim procedure changed
• Return of the advance on termination became harder

A working negotiation process

1. Keep the original draft and the file with edits separately
2. Compare the versions and write down only the differences in substance
3. Mark “accept / revise / reject” on each point
4. Send the counterparty a list of objections, not “the whole file”
5. Check the final text for risks once more, as a whole

Checklist before the final signature