DOCX, Text-Layer PDF, or TXT: Which Format Works Best for Contract Analysis

You're preparing a contract for analysis. You have a choice: keep it as DOCX, save as PDF, or convert to TXT. Which format should you pick?

This article helps you decide — based on how SmartSplitAI handles each format.

Format comparison

| Feature | DOCX | PDF (text layer) | TXT |

|---------|------|------------------|-----|

| Document structure | Fully preserved | Partially preserved | Lost |

| Tables | Preserved and analyzed | Preserved but less accurate analysis | Lose structure |

| Track Changes | Processed: insertions — yes, deletions — no, comments — separately | No | No |

| Version comparison | Supported | Not supported | Not supported |

| Text extraction quality | 100% (native text) | Depends on PDF quality | 100% (plain text) |

DOCX — the recommended format

DOCX is the default format for Microsoft Word and most modern editors. SmartSplitAI recommends DOCX as the primary format for analysis.

Why DOCX

1. Full structure. Headings, sections, clause numbering — everything is preserved. AI understands document hierarchy.

2. Tables. Table data is extracted with rows and columns intact. This matters for payment schedules, specifications, and timelines.

3. Track Changes. If the contract has gone through multiple revision rounds, AI processes tracked changes: accepted insertions are included, deleted text is excluded, and reviewer comments are extracted separately.

4. Version comparison. If you have two versions of the same contract, SmartSplitAI can compare them and show what changed. This works only with DOCX.

When to use DOCX

• You received the contract as DOCX from the counterparty.
• You're drafting in Microsoft Word or Google Docs (export as DOCX).
• You care about change history and version comparison.

Text-layer PDF — an acceptable alternative

PDF is a common format for final contract versions. SmartSplitAI works with PDFs that have a text layer.

How to check a PDF

1. Open the PDF in any viewer.

2. Try selecting text with your mouse.

3. Copy the selected text and paste it into a text editor.

4. If text copies — the PDF works for analysis.

5. If the cursor draws a selection rectangle and nothing copies — it's a scan (image), not text. This file won't be analyzed.

PDF limitations

• Text extraction quality depends on how the PDF was created.
• Some PDFs store text in fragments — paragraph order may break.
• Tables in PDFs are analyzed but with lower accuracy than DOCX.
• No Track Changes or version comparison.

When to use PDF

• The contract arrived as PDF and text copies successfully.
• You don't have the original DOCX.

TXT — for quick checks

TXT is a plain text format. SmartSplitAI accepts TXT, but it's a compromise option.

What you lose with TXT

1. Formatting. Headings, bold, italics — all gone.

2. Structure. Clause numbering may disappear if it relied on formatting.

3. Tables. Table data becomes unstructured text.

When to use TXT

• You only have the contract text (e.g., from an email).
• You need a quick preliminary assessment before requesting the full version.
• Formatting isn't critical for the initial analysis.

What SmartSplitAI doesn't accept

• Scanned PDFs. Files created by a scanner in image mode have no text layer and can't be analyzed.
• Photos of contracts. Phone snapshots don't provide the quality needed for text extraction.
• PDFs without a text layer. For example, PDFs created from images.

This is an intentional limitation: OCR introduces errors that are unacceptable for contract analysis.

Recommendation

If you have a choice — use DOCX. It's the format that delivers the most complete and accurate results. Text-layer PDF is an acceptable fallback. TXT is a compromise when other formats aren't available.

For more on uploading documents, read our guide on uploading a contract for AI review.