due diligence

American  

[doo dil-i-juhns, dyoo] / ˈdu ˈdɪl ɪ dʒəns, ˈdyu /

noun

Law, Business.

1. reasonable care and caution exercised by a person who is buying, selling, giving professional advice, etc., especially as required by law to protect against incurring liability.

   The court said there was due diligence on the part of the plaintiff.

2. the process of gathering or disclosing relevant and reliable information about a prospective sale, purchase, contract, etc..

   You should perform due diligence on a company before investing.

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Usage

What does due diligence mean? Due diligence most generally means reasonable care and caution or the proper actions that a situation calls for, especially those that help to avoid harm or risk.Due means “proper” or “required.” In legal contexts, diligence means “the degree of care required in a given situation.” In this way, due diligence is the level of care or caution that a specific situation calls for.Due diligence is especially used in legal and business contexts involving buying, selling, or giving professional advice. This kind of due diligence is often required by law in order to prevent liability.The phrase due diligence can also refer to the process of researching or disclosing pertinent information before entering into a contract or deal.For example, in the sale of a house, due diligence on the part of the seller involves disclosing information about the house, such as major problems and the dates when repairs were made. The buyer performs their due diligence by gathering this information and making the proper inspections of the house before the purchase.It can also be used in more general contexts, as in Don’t believe everything you read on the internet—do your due diligence and fact-check anything that sounds fishy.The phrase is often used with the verbs perform and do.Example: Be sure to do your due diligence before investing—you want to be sure where your money is going and what the terms are.

Etymology

Origin of due diligence

First recorded in 1450–1500, for the earlier sense “requisite effort”; 1785–90, for the current sense

Example Sentences

“This means raising standards, embracing robust due diligence measures, creating clear links between revenue and social outcomes, and designing programs that contribute to national development.”

From Barron's

He had done his “due diligence,” she said.

From The Wall Street Journal

“That’s why you shouldn’t play the game of assumptions, and just do the due diligence on the front end,” Gomes added.

From Los Angeles Times

It’s easy to do your due diligence before hiring a financial adviser: You can use BrokerCheck to see if the adviser has any disciplinary black marks.

From MarketWatch

The committee said the breach came as a result of a misunderstanding of the rules "rather than a disregard for them" and also recommended the House seek advice from professional experts on due diligence.

From BBC