How to review an NDA in Microsoft Word

A non-disclosure agreement looks short and standard, which is why it is easy to sign one with a problem in it. This guide walks through a practical NDA review in Word: what to settle before you read, which clauses to check, and how to send back clean tracked-change redlines with LexDraft.

Before you start: know your side

Most NDA review decisions depend on one question: will your client mostly share information, mostly receive it, or both?

• Disclosing party: you want a broad definition of confidential information, a long term, and strong remedies.
• Receiving party: you want clear exclusions, a fixed term, and no hidden obligations beyond confidentiality.
• Mutual NDA: both sides share, so aim for terms your client could live with in either role.

Step by step: review an NDA in Word with LexDraft

1. Open the document in Word. LexDraft is a Word add-in from Microsoft AppSource. It opens as a side panel in Word 365 (Windows and Mac), Word 2021 and Word on the web, so there is nothing to upload and no other app to learn.
2. Set the job. Run the review with the NDA playbook. It is one of four built-in review playbooks (NDA, SaaS MSA, DPA and Services), and its rules guide each review. LexDraft also flags standard terms that are missing.
3. Read the findings by severity. Each finding is graded Critical, High, Medium or Low. Start with Critical and High, then decide how much time the rest deserve.
4. Run the quick checks. The defined-term and cross-reference checks are rule-based and run without AI. They catch terms that are used but never defined, terms defined but never used, and references such as "Section 5.3" or "Exhibit B" that point nowhere. Each finding has a jump link to the exact spot.
5. Accept or reject each redline. Proposed changes are word-level edits, so only the words that need to change are touched. When you accept one, it lands as a native Word tracked change, ready for the other side.
6. Ask about anything unclear. Use the LexDraft chat in the Word sidebar to get a plain-English explanation of a clause, then ask follow-up questions in the same chat.
7. Do your own final read. AI review can miss issues or be wrong. Qualified counsel must check every output before it goes out.

What to check in each NDA clause

• Definition of confidential information. Is it so broad that everything counts, or does it require marking that busy people will forget? Oral disclosures are a common gap.
• Exclusions. Look for the usual four: information that is public, already known to the recipient, independently developed, or received from a third party without a duty of confidence.
• Permitted use. Use should be limited to a stated purpose, such as evaluating a deal. Vague purposes invite disputes.
• Who may receive it. Employees and advisors with a need to know are normal. Check whether affiliates, lenders or contractors are covered and who is responsible for their breaches.
• Compelled disclosure. There should be a way to comply with a subpoena or regulator, usually with notice to the other side where the law allows.
• Term and survival. Check how long the agreement lasts and how long the duty of confidence survives. Trade secrets often need protection for as long as they stay secret.
• Return or destruction. Allow for backup copies that cannot practically be deleted, kept under the same confidentiality duty.
• Remedies. Injunctive relief language is common. Watch for one-sided indemnities or fee-shifting.
• Extra obligations. Non-solicitation, non-compete or exclusivity terms sometimes hide in an NDA. Flag them for the client.
• Governing law and venue. Make sure the state and forum suit your client. LexDraft works under US law, covering federal law, all 50 states and D.C., and under UK law (England & Wales, Scotland or Northern Ireland).

Common NDA review mistakes

• Reviewing the counterparty's form without checking it against your client's role.
• Missing a residuals clause, which can let the recipient use what its people remember.
• Leaving defined terms inconsistent, such as "Confidential Information" in one section and "Proprietary Information" in another. The defined-term check catches this.
• Sending a marked-up PDF instead of tracked changes, which makes the next turn slower for everyone.

Practice on a sample first

If you want to see how LexDraft handles an NDA before using a client document, download the fictional NDA. It has deliberately planted inconsistencies. You can also try the free NDA review practice tool in your browser.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. Spotted something out of date? Email support@lexdraft.ai and we will fix it.