due diligence

noun

1
law : the care that a reasonable person exercises to avoid harm to other persons or their property
failed to exercise due diligence in trying to prevent the accident
2
business : research and analysis of a company or organization done in preparation for a business transaction (such as a corporate merger or purchase of securities)

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Doing Your Due Diligence

Due diligence has been used since at least the mid-fifteenth century in the literal sense “requisite effort.” Centuries later, the phrase developed a legal meaning, namely, “the care that a reasonable person takes to avoid harm to other persons or their property”; in this sense, it is synonymous with another legal term, ordinary care. More recently, due diligence has extended its reach into business contexts, signifying the research a company performs before engaging in a financial transaction. This meaning may also apply to individuals: people are often advised to perform their due diligence before buying a house, signing a loan, or making any important purchase.

Examples of due diligence in a Sentence

Recent Examples on the Web The Dolphins have done their due diligence on wide receivers through the draft process, meeting with Michigan’s Roman Wilson, Florida’s Ricky Pearsall and Texas A&M’s Ainias Smith, among others. Daniel Oyefusi, Miami Herald, 3 Mar. 2024 Prior to purchase, proper due diligence is important to avoid pitfalls within a mobile home park investment. Andrew Keel, Forbes, 1 Mar. 2024 Moreover, ad exchange bidding platforms do minimal due diligence on the hundreds or even thousands of entities that have a presence on their servers. Byron Tau, WIRED, 27 Feb. 2024 In the rush to attract Cash App users, neither Cash App nor Lincoln performed extensive due diligence on customers, the whistleblowers contend. Gretchen Morgenson, NBC News, 16 Feb. 2024 The guide provides comprehensive information on the pre-sale strategic planning, valuation, due diligence, contract negotiations, and exit strategy stages of the marina sales process. Kansas City Star, 13 Feb. 2024 People who want to utilize creative financing can mitigate risks by doing their due diligence and research to make sure that the long-term financial flow is a net positive, not just in the short term. Pace Morby, Forbes, 22 Feb. 2024 Do your due diligence, find out where your allies stand and don’t disclose information that someone may use against you. Eugenia Last, The Mercury News, 19 Feb. 2024 Trump testified that regardless of what his financial statements said, banks did their own due diligence and would’ve qualified him for the loans anyway. Michael R. Sisak, Fortune, 19 Feb. 2024

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'due diligence.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1598, in the meaning defined at sense 1

Time Traveler
The first known use of due diligence was in 1598

Dictionary Entries Near due diligence

Cite this Entry

“Due diligence.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/due%20diligence. Accessed 15 Mar. 2024.

Legal Definition

due diligence

noun
1
: such diligence as a reasonable person under the same circumstances would use : use of reasonable but not necessarily exhaustive efforts

called also reasonable diligence

Note: 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 transaction
b
: the process of investigation carried on usually 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 especially purchase of securities) for the purpose of providing information with which to evaluate the advantages and risks involved
the greatest exposure…for failure to conduct adequate due diligence arises in the context of public offerings of securitiesG. M. Lawrence
c
: the defense (as to a lawsuit) that due diligence was conducted

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