Redline a Counterparty NDA

A counterparty emails you their NDA. You need to mark it up against your organization’s standards and send it back, ideally today, and then do the same dance again when their next version lands. Customers call this whole loop redlining, and it is what the Pactly Word plugin is built for.

This guide walks the redline end to end as one story: open the document, run the review, work through what gets flagged, send your markup, and pick it back up on the next round. It points to the detailed how-to articles at each step rather than repeating them, so read it as the map and follow the links for the turn-by-turn.

Save the counterparty’s NDA, open it in Microsoft Word, and open the Pactly pane from the ribbon. On the home screen, choose Review Contract, fill in the New Counterparty Contract dialog (a name, the contract type, and the playbook to check against), and click Review.

The playbook is the part that matters most here: it carries your organization’s stance on each NDA term, and the review is only as right as the playbook you pick. A vendor-agreement playbook run against an NDA flags the wrong things. If you are not sure which to choose, ask whoever maintains your playbooks.

The plugin uploads the document and shows AI analysis in progress while it compares the relevant clauses against the playbook. This typically takes 3 to 5 minutes. You can tick Play sound when complete and carry on with other work.

For the full start-to-results walkthrough, see Running a Playbook Review.

When the analysis finishes, the pane lists your positions, one per topic the playbook checks (Confidentiality, Term, Governing Law, and so on). Each carries a status, and a counter at the top tracks your progress, for example 3/22 positions completed.

A position can also show as Pending (not yet decided) or Uncertain (a clause was found but the call was not clear-cut). Treat Uncertain like Not compliant: read it yourself and decide.

Open any position to see the detail behind its status: the Evidence tab shows the clauses that matched, Preferred clauses holds your approved language, and a Why Compliant? / Why Not compliant? block (the heading reflects the position’s status) explains the AI’s reasoning. Your work is the Not compliant and Uncertain ones.

For every position that needs work, you have three moves. Most NDAs use all three across the document.

On a flagged position’s Preferred clauses tab is your organization’s approved wording for that topic, ready to drop into the document. You insert it one of two ways:

• Adapt & Insert rewrites the clause to match this NDA’s own terminology first, so “Discloser” or “Supplier” becomes whatever term the contract actually defines, before it lands. Use this so the inserted clause reads as part of the document.
• Insert as-is drops the approved clause in unchanged, for when the wording already fits.

Either way the language lands with track changes on, so the counterparty sees exactly what you proposed. For the difference between the two and when to use each, see Adapt & Insert vs Insert as-is.

When there is no neat fallback to drop in, Generate Fix on a Not-compliant position drafts a redline that pulls the clause toward your position. You can add guidance first, for example “Make the confidentiality term two years, not five”, in the optional guidance box. Read what it drafts before you insert it. For free-form work with Assist, the plugin’s AI chat, see Using Assist (AI Chat).

Sometimes you accept a deviation rather than fight it: the counterparty’s term is fine for this deal, or the wording differs but the protection is the same. Set the position’s status, write a short justification, and click Confirm. The justification box takes up to 550 characters.

That justification is your audit trail: “Different wording, same protection” tells the next reviewer, and any auditor, why you let it stand. Aim to leave every position with a recorded status and every accepted deviation with a reason.

By the time the position counter reaches the total, your insertions and fixes are already in the document as tracked changes. There is no separate “export” step: it is your Word document, marked up, ready to send.

Before you record the round, save the document and send it to the counterparty the way you normally would (reply to their email with the marked-up file attached). The tracked changes and any comments you added travel with the file, so they see your proposed language and the notes alongside it.

Back in the plugin, open the Rounds tab and record this as a sent round (I am sending this draft). That stamps the exchange onto the contract record so the history is kept for you. See Rounds and Finalization for recording rounds.

The counterparty replies with their version. Open it in Word, and the plugin notices the document changed since your last sent round and prompts you to record a received round. Do that, and the review switches into comparison mode.

Now you are not re-reading the whole NDA. Positions whose clauses moved since the last round are flagged Changes detected; open one, read what changed on its Evidence tab, and click Acknowledge once you have looked. Everything you already cleared stays cleared. You handle any new deviations exactly as in step 3, send your next markup, and record another sent round.

When both sides finally agree, Finalize the contract from the Rounds tab. That records the agreed document as the final round and moves it out of negotiation. The complete trail, every round, every justification, lives on the contract record in the Pactly web app. Recording rounds, acknowledging changes, and finalizing are all covered in Rounds and Finalization.

Open in Word, run the review, insert fallbacks or generate fixes or override with a justification, send your redlines and record a sent round, then acknowledge what changed and repeat until you finalize. That is the redline.

• Running a Playbook Review
• Adapt & Insert vs Insert as-is
• Rounds and Finalization
• Using Assist (AI Chat)
• Why the plugin shows the wrong contract
• Pactly Word Plugin overview
• Word plugin quick start