Compare two contract versions in Word with Copilot

When the counterparty sends back your contract with their edits, you need to know every change, whom it favors and what you will do about it. Word already has the best tool for the first part: Review, Compare, which finds changes character by character. Copilot in Word adds the second part, explaining each change and its risk in plain language. Together they take about 15 minutes for a standard contract, and the order matters: Compare first, Copilot second.

Why Compare comes first

Copilot reading two versions side by side misses some edits, and the ones it misses are the dangerous ones: a deadline that changed from days to business days, a cap that lost a zero, a "shall" that became "may". Word's Compare catches all of them because it compares text mechanically. Run it first, and you have a complete list of changes that Copilot can then interpret.

Go to Review, Compare, select your version as the original and the counterparty's as revised. Word produces a third document with every change marked.

Anonymize if you leave Word

Inside the corporate Microsoft 365 tenant, the contract stays within company protection. If you want a second opinion from a chat assistant outside it, replace party names, amounts and details with placeholders [Party A], [Party B], [amount] before pasting.

Ask Copilot to explain

With the comparison document open, ask Copilot to go through the changes. This prompt gives the structure you need for a decision table:

Role: you are a corporate lawyer reviewing a counterparty's edits to a contract. Context: I represent {{our side}}. The contract is a {{contract type}}. Below are version 1 (ours) and version 2 (from the counterparty), with parties and amounts replaced by placeholders. Task: find all changes between the versions, including removed and added clauses and changes in numbers, deadlines and wording. For each change assess whom it favors and what risk it carries for us. Format: a table clause | before | after | favors | risk for us | proposal. As separate lists: removed clauses, new clauses, changes in numbers and deadlines. Leave unchanged clauses out of the table. Version 1: {{version 1}} Version 2: {{version 2}}

Reconcile the two lists

Compare Copilot's table with Word's marked changes. Every change Word found should appear in the table; if one is missing, ask Copilot about that clause specifically. Pay extra attention to clauses on liability, deadlines, payment and termination. Then pick three clauses Copilot called unchanged and confirm in the comparison document that they really are.

Watch the sources in Copilot's answer. In the business version it can draw on other company documents you have access to, and a proposal for wording may come from a different contract with different terms.

Decide

Build the final table with a decision on each change: accept, reject, or propose your own wording. Rewrite suggestions with Copilot if you like, but after any rewrite check amounts, dates and party names against the original; rewriting in a different tone also changes content.

What to do

1. Run Review, Compare in Word with your version as original and theirs as revised.
2. Anonymize the text if you use an assistant outside the corporate tenant.
3. Ask Copilot to explain each change, whom it favors and the risk.
4. Confirm every change Word found appears in Copilot's table.
5. Spot-check three clauses Copilot called unchanged.
6. Build the table with a decision on each change.

Complete

Every change in the table is found in the original, and a spot check of three clauses the model called unchanged confirms they match.

Licenses

Copilot in Word comes with Microsoft 365 Copilot at 30 USD per seat with annual billing, with references to company files and mail, or Copilot Pro at 20 USD per month for individuals with Microsoft 365 Personal or Family. See Copilot in Word pricing, the lawyer's version of this task and Copilot in Word vs Claude.