due diligence

noun

Definition of due diligence

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)

Doing Your Due Diligence More Example Sentences Learn More About due diligence

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 compression of due diligence comes in lockstep with a huge new influx of capital into the venture world. — Rebecca Szkutak, Forbes, 1 Jan. 2022 Russian cryptocurrency traders say the United States is imposing an unfair burden of due diligence on their companies, given the quickly evolving nature of regulations. — New York Times, 6 Dec. 2021 The museum’s failures of due diligence were deplorable, Bogdanos told me, but fell short of a provable crime. — Ariel Sabar, The Atlantic, 23 Nov. 2021 Traveling and dining out can be feel more daunting than enticing, as there’s a lot of due diligence, caution and extra planning required when doing it with food allergies. — Essence, 11 Oct. 2021 Other methods of due diligence include looking for a working customer-service number and where the product ships from. — Wsj Noted., WSJ, 25 June 2021 As part of that due diligence, Duke’s Jalen Johnson is scheduled to meet with the Cavs on Friday, sources say. — Chris Fedor, cleveland, 24 June 2021 The private equity firm had worked on an offer backed by Suez’s employees and its board, that would require six weeks of due diligence. — Francois De Beaupuy, Bloomberg.com, 5 Oct. 2020 In 2021, that timeline was often shaved down to a week or less—a tight window to try to get to know the founders, evaluate the startup’s potential, and complete due diligence. — Arielle Pardes, Wired, 24 Dec. 2021

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'due diligence.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

6 Jan 2022

Cite this Entry

“Due diligence.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/due%20diligence. Accessed 17 Jan. 2022.

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More Definitions for due diligence

due diligence

noun

Legal Definition of due diligence

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.

2a : 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