How to Redact Contracts

Contracts often contain a mix of information—some you need to share, some you're legally required to protect, and some that would harm your business if disclosed. Knowing what to redact, and when, is crucial for legal compliance and business protection.

Why Redact Contracts?

Common scenarios requiring contract redaction:

• Legal discovery: Producing documents while protecting privileged or irrelevant information
• M&A due diligence: Sharing contracts with potential buyers while protecting sensitive terms
• Vendor onboarding: Providing reference contracts without exposing pricing
• Regulatory audits: Complying with document requests while protecting third-party data
• Public records requests: FOIA responses where trade secrets must be protected
• Investor data rooms: Sharing business documents while protecting confidential terms

What to Redact in Contracts

Personal Identifiable Information (PII)

• Social Security numbers
• Personal addresses (home addresses of signatories)
• Personal phone numbers
• Personal email addresses
• Bank account numbers
• Driver's license numbers

Commercially Sensitive Terms

• Pricing and rate cards
• Volume discounts and rebates
• Commission structures
• Payment terms (if non-standard)
• Performance bonuses or penalties
• Exclusivity arrangements

Trade Secrets and IP

• Technical specifications
• Proprietary methodologies
• Source code references
• Customer lists embedded in exhibits
• Pricing formulas or algorithms

Third-Party Information

• Other parties' confidential information
• Subcontractor details
• Reference customer names
• Third-party pricing

Redacting by Context

Legal Discovery

During litigation, you may need to produce contracts. Legitimate redactions include:

• Attorney-client privileged communications (margin notes, etc.)
• Information protected by protective orders
• Third-party confidential information unrelated to the dispute
• Trade secrets (with proper privilege log entries)

Work with your attorney—improper redaction can result in sanctions or adverse inferences.

M&A Due Diligence

When sharing contracts in a data room:

• Redact customer-specific pricing until LOI/exclusivity
• Redact individual personal information
• Consider redacting counterparty names initially (use "Customer A")
• Keep contract terms visible (term lengths, renewal provisions, termination rights)

Vendor Reference Contracts

If a new vendor asks to see a similar contract:

• Redact all pricing
• Redact the other party's name and details
• Redact any custom terms specific to that relationship
• Keep standard terms visible for comparison

Regulatory Audits

Regulators often have broad document requests. You may still redact:

• Attorney-client privileged content
• Information outside the scope of the request
• Third-party confidential information (with explanation)

Always consult legal counsel before redacting for regulatory purposes.

Preserving Contract Integrity

When redacting contracts, maintain:

• Page numbers: Keep pagination visible so references still work
• Section headers: Show structure even if content is redacted
• Exhibit labels: Keep exhibit letters/numbers visible
• Signature blocks: Show that signatures exist (may redact names if needed)
• Date references: Keep dates visible for timeline understanding

Technical Considerations

Contracts with Track Changes

Word documents with track changes contain revision history. Before redacting:

1. Accept or reject all changes
2. Delete all comments
3. Save as a new file
4. Convert to PDF
5. Then apply redactions

Contracts with Embedded Files

Some contracts have embedded Excel sheets, images, or other attachments. These may contain metadata or content that needs separate redaction.

Multi-Party Contracts

For contracts with multiple parties:

• Create different redacted versions for different recipients
• Party A may see certain terms redacted that Party B can see
• Keep clear version control to avoid confusion

Proper Redaction Process

1. Identify purpose: Why is this contract being shared? Who will see it?
2. Review obligations: Check confidentiality clauses and any applicable NDAs
3. Mark for redaction: Identify all items to be redacted
4. Apply redactions: Use proper redaction software (not black boxes)
5. Verify: Test that redacted content cannot be recovered
6. Document: Log what was redacted and the justification
7. Store: Keep both original and redacted versions securely

Common Mistakes

• Using black rectangles: These don't actually remove text from PDFs
• Forgetting headers/footers: Confidential information often appears in document margins
• Missing cross-references: If pricing is in Section 3 and referenced in Section 7, both need attention
• Ignoring metadata: Author names, revision history, and properties may reveal information
• Inconsistent redaction: Redacting a name in one place but leaving it visible elsewhere