BUSINESS & TECHNOLOGY CONTRACTING

Non-Disclosure Agreements vs. Technology Evaluation Agreements: A Practical Overview

Introduction

In collaborative environments—such as technology development, research partnerships and innovation-driven projects—sharing confidential information is often necessary. To protect the interests of all parties, two main types of agreements are commonly used: Non-Disclosure Agreements (NDAs) and Technology Evaluation Agreements (TEAs). While both aim to safeguard sensitive data, they serve different functions and are applied in distinct scenarios. This practice note explains their differences, use cases, and the essentials for organizations.

What is an NDA?

An NDA is a contract that obligates parties to keep certain information private. It is typically used when one or more parties need to exchange business secrets, technical details, or other proprietary information, but do not intend to grant any rights to use that information beyond the agreed context. NDAs are foundational in early negotiations, employment, and other situations where trust and confidentiality are critical.

What is a TEA?

A TEA, on the other hand, is designed for situations where a party needs to access and test a specific technology, product or prototype. The agreement allows for hands-on evaluation but strictly limits the recipient’s rights—use is confined to assessment only, with no permission for commercial use, reverse engineering, or sharing with others. TEAs are especially relevant when a company or investor wants to try out a technology before making a commitment.

Key Differences

FeatureNDA: Non-Disclosure AgreementTEA: Technology Evaluation Agreement
Main GoalPrevents unauthorized sharing of informationPermits evaluation of technology under strict terms
What’s CoveredData, documents, trade secretsData plus physical or digital technology
Usage RightsNo use beyond discussion or reviewLimited use for testing/evaluation only
Typical DurationFixed period (e.g., 2–5 years)Shorter, tied to evaluation (e.g., 3–12 months)
End-of-Term ActionReturn/destroy confidential infoReturn/destroy info and technology
Risk ManagementFocus on secrecyAlso covers liability, no reverse engineering, etc.
Next StepsOften leads to further negotiationUsed to decide on licensing or partnership

When to Use Each Agreement

NDAs are best for:

  • Initial talks between startups and investors
  • Reviewing suppliers or service providers
  • Employment or consulting arrangements
  • Academic-industry discussions before tech transfer
  • Mergers, acquisitions, or due diligence
  • Engaging freelancers with access to sensitive data

TEAs are ideal for:

  • Evaluating university or research institution technologies
  • Trialing vendor products before purchase
  • Joint R\&D projects needing hands-on access
  • Allowing investors or partners to test prototypes
  • TIA-funded projects in South Africa requiring structured feedback

TEAs in the South African Context: TIA Guidelines

The Technology Innovation Agency (TIA) in South Africa often requires TEAs for projects involving technology trials. These agreements:

  • Allow recipients to test technology for a set period
  • Restrict use to evaluation only—no commercial deployment or reverse engineering
  • Mandate return or destruction of all materials after the evaluation
  • Protect the technology owner’s intellectual property and limit liability
  • Serve as a step before licensing or commercialization discussions

Conclusion

NDAs and TEAs are both essential for protecting confidential information and intellectual property in collaborative projects. NDAs focus on secrecy and non-use, while TEAs provide a framework for controlled technology trials. Choosing the right agreement depends on whether you’re sharing information or enabling hands-on evaluation.

References and Further Information

Disclaimer

This practice note is for informational purposes only and does not constitute legal advice. Laws may change, and specific circumstances can affect how legal principles apply. Consult a qualified legal professional before acting on this information.

Leave a Reply

Your email address will not be published. Required fields are marked *

© 2025 Centre For Innovative Commerce CC
Privacy Policy Terms and Conditions Sitemap