due diligence

[doo dil-i-juhns, dyoo]

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.

Word History and Origins

Origin of due diligence¹

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

Example Sentences

But it happens more frequently when financial markets get frothy and due diligence deteriorates.

Read more on The Wall Street Journal

Does Tricolor’s crash reflect a broader breakdown in due diligence?

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“This case was a 28-year-old versus 300 investment bankers from the largest bank in the world that did due diligence in 22 business days.”

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“It’s certainly nice to be able to get a couple days to reset, prepare, and we’re kind of doing our due diligence,” manager Dave Roberts said on Saturday afternoon.

Read more on Los Angeles Times

"DHS enforcement operations are highly targeted, and officers do their due diligence. We know who we are targeting ahead of time," an agency official said in a statement to BBC.

Read more on BBC

When To Use

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.