due diligence

Meaning

This term refers to the careful investigation, audit, or review of a business or person prior to signing a contract or entering into a financial agreement. It is used to ensure all facts are verified and risks are thoroughly assessed before making a final decision. The tone is highly professional, legalistic, and serious.

Examples

• We need to conduct thorough due diligence before finalizing the acquisition of their startup.

  We need to conduct thorough due diligence before finalizing the acquisition of their startup.

• The investment firm is currently doing its due diligence on our financial history.

  The investment firm is currently doing its due diligence on our financial history.

• Failing to perform due diligence can lead to costly legal issues down the road.

  Failing to perform due diligence can lead to costly legal issues down the road.

• Investors expect a high level of due diligence before they commit any capital.

  Investors expect a high level of due diligence before they commit any capital.

• After weeks of due diligence, we decided the merger was too risky.

  After weeks of due diligence, we decided the merger was too risky.

Common Mistakes

• ✗ We must make due diligence on this company.

  ✓ We must do due diligence on this company.

  The expression 'due diligence' collocates with the verbs 'do', 'conduct', or 'perform', not 'make'.

• ✗ The team is busy with the due diligences.

  ✓ The team is busy with due diligence.

  'Due diligence' is an uncountable noun and should not be pluralized.

Related Expressions

Practice

• Before buying the property, our legal team conducted extensive ___.

  💡 The careful investigation of a business or asset before purchase.

  Show answer

  due diligence

• You can't just sign the contract without doing your ___ first.

  💡 The necessary research to verify facts and assess risks.

  Show answer

  due diligence