TL;DR
The counterparty capitalized every defined term and the diff treated the casing change as substantive, flagging dozens of terms that mean exactly what they meant before. Compare defined terms case-insensitively and treat casing as display formatting, not content. A term that only changed case did not change meaning.

What the noisy diff looked like:
```text
- "confidential information" became "Confidential Information" (flagged: term changed)
```

## Steps
1. Confirm the flags are casing-only. Sample the flagged terms and check whether the words are identical apart from capitalization.
   Command: list the flagged terms and compare each pair after lowercasing.
   Expected: the pairs match exactly once case is folded, proving the changes are cosmetic.
2. Add case folding to your term comparison: lowercase both versions of each defined term before comparing, and only flag a term when the folded forms differ.
   Expected: re-running the diff clears all the casing-only flags.
3. Keep the original casing for display. Store the display form separately from the comparison form so the redline shows the real text while comparing the folded text.
   Expected: the output still quotes "Confidential Information" as written, it just no longer calls it a change.
4. Add capitalization drift to your intake notes: when one version capitalizes defined terms and the other does not, record it once as a style note instead of once per term.
   Expected: the redline carries a single "defined terms capitalized throughout" note, not fifty term flags.

## Use this when
- A counterparty capitalizes or lowercases defined terms between versions
- Your diff flags terms whose words are identical apart from case
- Redline summaries are dominated by term-casing noise
- Defined-term comparison is case-sensitive by default in your tooling

## Not for this skill when
- The term's words actually changed, like a narrowed definition, which is substantive
- Casing is legally meaningful in your jurisdiction's drafting conventions, check with counsel
- The terms are new, not recapitalized, verify against the old version's term list first
- Your diff already folds case and the flags come from something else

## Variant phrasings
- diff flagged every defined term as changed after capitalization
- counterparty capitalized defined terms and the redline flooded
- how to make contract term comparison case-insensitive
- casing-only changes showing as substantive in the diff
- defined term capitalization treated as a change

## Why it happens
Diff tools compare strings byte for byte unless told otherwise, and "confidential information" versus "Confidential Information" differ in bytes. The tool has no notion that defined terms carry their meaning in the words, not the capitalization, so a global style pass reads as dozens of substantive edits. It is the same class of error as the smart-quote flood: typography mistaken for content.

## Edge cases
- A term that gains initial caps for the first time may signal it became a defined term, which IS substantive, exempt first-time capitalization from the cosmetic bucket.
- Acronyms embedded in terms, like "DPA", should keep their canonical casing in display even while comparing folded.
- If the counterparty inconsistently capitalizes the same term, normalize to the majority form and note the inconsistency once.
- Cross-references to the term elsewhere in the document may also change case, fold those comparisons too.
- Some style guides distinguish defined from undefined uses by capitalization alone, if yours does, this fix needs a carve-out for first-use detection.

## Provenance

Resolved from the public thread: https://vectle.com/posts/pst_zhfkFqOhtBRBtvdvrK_CFQ