WHAT IS DUE DILIGENCE?
Due Diligence is an investigative process conducted by reviewing the documents, collecting information, interviewing employees, to evaluate the legal risk and compliance with regulation associated with the transaction.
COMMON USAGE OF DUE DILIGENCE :
DUE DILIGENCE OF CONTRACTS AND LONG-TERM AGREEMENTS – lawyers pursue an investigation to identify self-incriminating or adverse terms and conditions which may be detrimental against client. Clients are made aware of such adverse clauses and advised with favorable alternative by vetting the contracts.
DUE DILIGENCE OF DEBT, WARRANTIES, COMPENSATION
DUE DILIGENCE OF PENDING AND POTENTIAL LAWSUIT
DUE DILIGENCE OF PROPERTY DEEDS, INSTRUMENT OF LEASE
TAX DUE DILIGENCE
HUMAN RESOURCE DUE DILIGENCE
COMPANY DUE DILIGENCE
INTELLECTUAL PROPERTY DUE DILIGENCE
Why is legal Due Diligence necessary?
Legal due diligence is necessary before entering into a project, merger, acqusiition to be informed about the compliance and reviewing of documents and to have a clear understanding of affiliated risk which may include contingent liabilities, pending litigations, restriction on businesses, insurance policies, employee benefits, intellectual property infringement.
The information gathered through legal due diligence will be beneficial for both parties to a transaction in drafting and negotiating any agreement. It would also help parties to allocate risks when drafting representations and warranties.
