TLDR:
Redlining is the process of marking up a document (typically a contract) to show proposed changes, deletions, and additions, standard practice in legal negotiations where parties track revisions.
Redlining Best Practices
Effective redlining requires more than just tracking changes — it requires clear organization of comments and a discipline around what constitutes a substantive change versus a stylistic edit. When sending a redlined document, best practice is to accompany it with a negotiation memo that explains the rationale for major changes rather than leaving the counterparty to interpret intent from context alone. Numbering rounds of negotiation (Redline V1, V2, etc.) and maintaining clean and marked versions separately prevents confusion in multi-round negotiations.