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
| Feature | NDA: Non-Disclosure Agreement | TEA: Technology Evaluation Agreement |
| Main Goal | Prevents unauthorized sharing of information | Permits evaluation of technology under strict terms |
| What’s Covered | Data, documents, trade secrets | Data plus physical or digital technology |
| Usage Rights | No use beyond discussion or review | Limited use for testing/evaluation only |
| Typical Duration | Fixed period (e.g., 2–5 years) | Shorter, tied to evaluation (e.g., 3–12 months) |
| End-of-Term Action | Return/destroy confidential info | Return/destroy info and technology |
| Risk Management | Focus on secrecy | Also covers liability, no reverse engineering, etc. |
| Next Steps | Often leads to further negotiation | Used 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
- https://www.lawtrades.com/whitepapers/nda-playbook
- https://stripe.com/resources/more/nda-for-startups-a-guide-for-founders
- https://digitallegalforum.net/wp-content/uploads/2024/10/CON-eval-trial-template-1.pdf
- https://www.genieai.co/en-za/template/evaluation-license-agreement
- https://stratlaw.co.za/essential-terms-of-a-non-disclosure-agreement-under-south-african-law/
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.