- due diligence
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due diligence n1: such diligence as a reasonable person under the same circumstances would use: use of reasonable but not necessarily exhaustive efforts – called also reasonable diligence;◇ Due diligence is used most often in connection with the performance of a professional or fiduciary duty, or with regard to proceeding with a court action. Due care is used more often in connection with general tort actions.2 a: the care that a prudent person might be expected to exercise in the examination and evaluation of risks affecting a business transactionb: the process of investigation carried on usu. by a disinterested third party (as an accounting or law firm) on behalf of a party contemplating a business transaction (as a corporate acquisition or merger, loan of finances, or esp. purchase of securities) for the purpose of providing information with which to evaluate the advantages and risks involvedthe greatest exposure...for failure to conduct adequate due diligence arises in the context of public offerings of securities — G. M. Lawrencec: the defense (as to a lawsuit) that due diligence was conducted
Merriam-Webster’s Dictionary of Law. Merriam-Webster. 1996.
- due diligence
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The process by which a purchaser of or an investor in a company or business investigates the records of the target to support its value and find out whether there are "skeletons in the cupboard". Professional reports from accountants and solicitors may be included. The process is covered by confidentiality undertakings and supported by warranties.
Easyform Glossary of Law Terms. — UK law terms.
- due diligence
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Care or attention to a matter that is sufficient enough to avoid a claim of negligence, though not necessarily exhaustive.Category: Business, LLCs & Corporations → Buying or Selling a Business
Nolo’s Plain-English Law Dictionary. Gerald N. Hill, Kathleen Thompson Hill. 2009.
- due diligence
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1) The purpose of due diligence is to uncover and understand all liabilities of the business and check what the owners are saying is true, eg, nature and condition of the assets, no major disputes. Information may be made available through an information memorandum, seller's response to the buyer's due diligence questionnaire, a data room and/or accountants and other specialist reports on the company.2) The process by which a buyer of or an investor in a company or business investigates the records of the target to support its value and find out whether there are matters on which it requires further information or which it should use as a platform to renegotiate the price. In the acquisition of a business, reports from accountants and legal advisers are usually prepared to record the findings of the legal and financial due diligence process. The due diligence process is supported by warranties (warranty) and indemnities (indemnity) in the acquisition agreement.+ Due DiligenceUSAThis term has a number of meanings. In the context of:• Securities and capital markets, a fact-finding process undertaken by the working group to verify the accuracy and completeness of the registration statement or other offering document (such as a private placement memorandum)). See Practice Note, Due Diligence: Securities Offering (www.practicallaw.com/4-380-7917).• Mergers and acquisitions or finance, the act of investigating a business entity, person or party in preparation for a business or loan transaction. Due diligence usually includes reviewing documents, talking to management, visiting a location and performing analyses.Related linksdue diligence
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
