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Due diligence definition

What is the definition of "due diligence"? 
Due diligence is the investigation process that is used in negotiations to verify and uncover information to assist in making a decision. Due diligence is commonly used in anticipation of the purchase of a business, real estate or the extension of credit. Due diligence steps may include, but are not limited to:

- Verifying representations made
- Evaluate risks
- Confirm the financial elements, such as inventory, receivables, payables, etc.
- Ensure compliance with all laws and regulations

In the purchase of a business, the due diligence process can take months, but should not be rushed at the expense of accurate discovery.

Due diligence may also relate to a legal obligation of a party meaning that they have to perform an act with a certain standard of care (the effort by an ordinarily prudent or reasonable party to avoid harm to anther party or the application of every reasonable precaution to avoid harm). 
Brain Trust contributor: Author of Instant Profits: Making Your Business Pay
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