exercise due diligence

Meaning

This expression means to perform a careful, detailed investigation or review of a business, person, or contract before signing an agreement or making a major decision. It is highly formal, commonly used in legal, financial, and corporate acquisition contexts. The tone is serious and professional.

Examples

• Before acquiring the startup, our legal team had to exercise due diligence.

  Before acquiring the startup, our legal team had to exercise due diligence.

• Investors must exercise due diligence to verify the financial health of the company.

  Investors must exercise due diligence to verify the financial health of the company.

• The board failed to exercise due diligence, resulting in a highly unprofitable merger.

  The board failed to exercise due diligence, resulting in a highly unprofitable merger.

• We need to exercise due diligence by thoroughly checking the supplier's background.

  We need to exercise due diligence by thoroughly checking the supplier's background.

• As a director, you have a legal obligation to exercise due diligence in all financial matters.

  As a director, you have a legal obligation to exercise due diligence in all financial matters.

Common Mistakes

• ✗ We must make due diligence before signing.

  ✓ We must exercise due diligence before signing.

  The verb 'exercise' (or sometimes 'do' or 'perform') collocates with 'due diligence'. 'Make' is incorrect.

• ✗ The team did a due diligence of the contract.

  ✓ The team exercised due diligence regarding the contract.

  'Due diligence' is typically an uncountable noun or part of the verb phrase 'exercise due diligence', so using 'a due diligence' is grammatically awkward.

Related Expressions

Practice

• Before investing your life savings, you should ___ on the fund's performance.

  💡 Do a careful and thorough investigation.

  Show answer

  exercise due diligence

• The acquisition failed because the buyers did not ___ regarding the target company's debts.

  💡 Perform the necessary legal and financial checks.

  Show answer

  exercise due diligence