How to review an NDA under English law

A non-disclosure agreement governed by English law looks routine, but a few English law rules change how it should be drafted and reviewed: consideration, third-party rights, the court's discretion over injunctions and the rules on penalties and restraint of trade. This checklist walks through each clause and shows how to redline it in Word with LexDraft.

Before you start

• Know your side. A discloser wants a wide definition and strong remedies. A recipient wants clear exclusions, a fixed term and no extra obligations. In a mutual NDA, aim for terms your client could accept in either role.
• Check the governing law. If the NDA is governed by the law of England and Wales, set LexDraft's jurisdiction chip to UK: England & Wales. If it is governed by Scots law, choose UK: Scotland, because the rules on consideration and remedies differ.

Clause checklist

• Consideration. An English law NDA needs consideration unless executed as a deed. Mutual promises usually supply it in a two-way NDA. In a one-way NDA, check that the discloser provides consideration for the recipient's confidentiality promise, for example by providing access to confidential information in exchange for that promise. If there is no fresh consideration, consider execution as a deed.
• Definition of confidential information. Too wide and it may be hard to enforce; too narrow, or dependent on marking, and oral disclosures slip through. Information disclosed before signing is another common gap.
• Exclusions. Public information, information already known to the recipient, information independently developed and information received from a third party who was free to disclose it. Check who bears the burden of proving an exclusion.
• Permitted purpose and recipients. Limit use to a stated purpose. Check whether group companies, professional advisers and funders may receive information, and whether the recipient is liable for their breaches.
• Disclosure required by law. Allow disclosure required by law, a court, a regulator or the rules of a stock exchange, with notice to the discloser where lawful.
• Third-party rights. If group companies should be able to enforce the NDA, say so under the Contracts (Rights of Third Parties) Act 1999. If not, exclude the Act expressly.
• Term and survival. Check how long the obligations last after the NDA ends. Trade secrets may need protection for as long as they stay secret; the Trade Secrets (Enforcement, etc.) Regulations 2018 sit alongside the contract.
• Return and destruction. Allow for automatic back-ups and copies that must be kept by law, held under the same duty of confidence.
• Remedies. A clause saying damages would not be an adequate remedy helps, but an injunction is still discretionary and the court decides. Fixed sums payable on breach must survive the penalty rule, which asks whether the sum is out of all proportion to the innocent party's legitimate interest.
• Hidden restrictive covenants. Non-solicitation or non-compete wording in an NDA is a restraint of trade. It is unenforceable unless it protects a legitimate interest and goes no further than reasonably necessary.
• Personal data. If personal data will be shared, check the UK GDPR and the Data Protection Act 2018 position, and whether a separate data sharing or processing agreement is needed.
• Governing law and jurisdiction. Name the law of England and Wales, cover non-contractual claims, and decide whether the courts of England and Wales should have exclusive jurisdiction.

Redline the NDA in Word with LexDraft

1. Open the NDA in Word, open LexDraft and set the jurisdiction to UK: England & Wales.
2. Run the quick checks. They are rule-based and run without AI, catching undefined or unused defined terms, broken cross-references, numbering gaps and inconsistent capitalisation.
3. Run the review with the NDA playbook. Findings are graded by severity, and each proposed change is a word-level edit.
4. Accept the redlines you agree with. They land as native Word tracked changes.
5. Ask the Assistant to explain a clause in plain English or to suggest wording for your side. Answers use UK spelling.
6. Look up any case you want to cite in the Case law tab, and read the judgment on Find Case Law before relying on it.

Common mistakes

• Using a US-form NDA with an English governing law clause, leaving US-specific wording such as references to state law or jury trial waivers.
• Forgetting that a one-way NDA needs consideration from the discloser, or execution as a deed.
• Letting a non-solicitation clause hide in the boilerplate.
• Defining "Confidential Information" in one clause and using "Proprietary Information" in another. The defined-term check catches this.

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This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. LexDraft is not affiliated with or endorsed by The National Archives or any court. Spotted something out of date? Email support@lexdraft.ai and we will fix it.