You need to compare two versions of a contract to find changes made during negotiation. Manually scrolling through pages risks missing a single altered clause. Copilot in Word can analyze both documents and highlight the differences for you. This article explains how to set up the documents and use Copilot to generate a comparison. You will learn the exact steps and the limitations of this feature.
Key Takeaways: Using Copilot to Compare Contract Versions
- Copilot pane > Compare documents: The primary command that triggers a side-by-side or summary comparison of two Word files.
- File naming convention: Use clear names such as Contract_v1.docx and Contract_v2.docx to avoid confusion when selecting source documents.
- Review pane after comparison: Copilot outputs a summary of changes; you must manually apply or reject each change using Word’s native Track Changes tools.
What Copilot in Word Does When Comparing Contracts
Copilot in Word uses Microsoft Graph and the underlying Word document model to detect differences between two versions. It does not rewrite the documents. Instead, it identifies added, deleted, or modified text and presents them in a summary. Prerequisites include an active Microsoft 365 Copilot license, a Word for the web or desktop app that supports Copilot, and both documents saved in OneDrive or SharePoint. The feature works best with text-heavy contracts that use consistent formatting. Tables and embedded objects may not be fully compared.
The comparison relies on the same diff engine that powers the built-in Compare function in Word. Copilot adds a conversational layer on top, allowing you to ask follow-up questions about specific changes. For example, you can ask “Show me only the changes to the indemnification clause.” This saves time compared to scanning a full markup document.
Steps to Compare Two Contract Versions Using Copilot
Follow these steps to compare two versions of a contract with Copilot. You need both files saved in the same cloud location.
- Open the newer version of the contract
Launch Word and open the most recent version of the contract. Copilot works from the currently open document. If you open the older version, Copilot may treat it as the base document. - Open the Copilot pane
Select the Copilot icon on the Word ribbon in the Home tab. The Copilot pane opens on the right side of the screen. If you do not see the icon, verify your Microsoft 365 Copilot license is active and you are signed in. - Enter the compare command
In the Copilot text box, type: Compare this document with [full file name of the older version]. For example: Compare this document with Contract_v1.docx. Press Enter to submit the request. - Review the comparison summary
Copilot processes the request and displays a summary of changes. The summary lists each change by section and describes the nature of the change, such as text added, text deleted, or text modified. The summary does not apply changes to the open document. - Ask follow-up questions about specific changes
Type a follow-up prompt such as Show me the changes in Section 3.2 or List only deleted clauses. Copilot filters the summary based on your request. This step helps you focus on critical sections without reading the entire summary. - Apply or reject changes manually
Copilot does not merge changes automatically. Use Word’s native Review tab > Compare > Combine to merge the two versions if you want a tracked-changes document. Alternatively, copy the relevant changes from the summary and edit the document manually.
If Copilot Cannot Find the Other Document or Returns Errors
Several issues can prevent Copilot from completing the comparison. Below are the most common problems and their solutions.
Copilot says it cannot find the file
Copilot requires both documents to be stored in the same OneDrive or SharePoint library. If the older version is saved locally on your hard drive, Copilot cannot access it. Move both files to the same cloud folder. Use the exact file name including the extension .docx in your prompt. For example, write Contract_v1.docx not the first version.
Copilot returns a vague summary with no specific changes
This occurs when the two documents are too similar or when formatting differences confuse the diff engine. Save both documents as plain .docx files with minimal formatting. Remove tracked changes from both versions before comparing. Use Word’s Review tab > Accept All Changes to clean up each document first.
Copilot compares the wrong sections
If the contract contains embedded tables or images, Copilot may ignore those elements. The comparison focuses on text content. For tables, export the table data to text or use Word’s native Compare feature under Review > Compare > Compare Documents. That tool handles tables more reliably.
Copilot Comparison vs Word’s Native Compare Feature
| Item | Copilot Comparison | Word Native Compare |
|---|---|---|
| Output format | Text summary in Copilot pane | New document with tracked changes and markup |
| Interaction | Conversational follow-up questions allowed | Static result, no follow-up |
| File location required | Both files in OneDrive or SharePoint | Any accessible location |
| Table handling | Incomplete or skipped | Full comparison of table structure and content |
| Applying changes | Manual copy or use Combine | Automatic tracked-changes document |
Use Copilot when you need a quick overview or want to ask targeted questions about specific clauses. Use Word’s native Compare feature when you need a complete, auditable markup document with all changes tracked. You can also use both in sequence: get a summary from Copilot, then run the native Compare for the full markup.
You can now compare two contract versions using Copilot in Word without leaving the application. Start with the newer document open and use the Compare this document with command. For deeper analysis, combine Copilot summaries with Word’s native Compare and Combine tools. Consider saving the comparison summary as a separate note file for reference during negotiation meetings.