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

The best buyers will have: Proof of funds or financing A clear reason for wanting to acquire Experience running or acquiring businesses A thoughtful approach to due diligence Don’t be afraid to ask questions: What’s your experience with acquisitions? —Lien De Pau, Forbes.com, 25 June 2025

However, in a letter sent to the director of the Florida Division of Emergency Management on Monday, quoted by the Herald, Miami-Dade's mayor requested that further due diligence of the site be conducted before construction began. —Hugh Cameron, MSNBC Newsweek, 24 June 2025

But there’s also an obligation of the employer to do its own due diligence when hiring. —Lori Weisberg, San Diego Union-Tribune, 22 June 2025

Some of the investors blame themselves for not performing their due diligence on Nicole and Littleton until too late, when the restaurants were already in trouble. —John McDermott, HollywoodReporter, 19 June 2025

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