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)

Did you know?

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

Diluted protections And even consumers who try to do their due diligence and read the labels may still be in the dark about what's in the products. —Ashley Belanger, Ars Technica, 24 Oct. 2023

That same month, China fined Mintz Group, a US corporate due diligence firm, about $1.5 million for allegedly conducting unapproved statistical work in the country. —Michelle Toh, CNN, 23 Oct. 2023

Dillard: Some people didn’t do their due diligence. —Meredith Blake, Los Angeles Times, 28 Sep. 2023

It still must be approved by the the University of California regents and there is a long list of due diligence still to be performed. —Paul Sisson, San Diego Union-Tribune, 27 Oct. 2023

In July, China fined the Mintz Group, a US corporate due diligence firm, about $1.5 million for allegedly conducting unapproved statistical work in the country. —Emiko Jozuka, CNN, 20 Oct. 2023

Unlike the Sharks, Newbill says the producers are not involved in the due diligence process. —Skyler Caruso, Peoplemag, 29 Sep. 2023

Some are being sued in a class action for failing to do due diligence on FTX. —WIRED, 27 Sep. 2023

A little due diligence should pay off handsomely in the future, so don't waste your time with frivolities. —Tarot Astrologers, Chicago Tribune, 6 Sep. 2023

See More

Word History

First Known Use

1598, in the meaning defined at sense 1

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 securities

—G. M. Lawrence

c

: the defense (as to a lawsuit) that due diligence was conducted