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Corporate and transactions · 2 min read

Legal due diligence: what should precede the decision?

Due diligence is not document archiving. It tests the assumptions supporting an investment or commercial decision.

Due diligence loses value when it becomes a long document list without a clear question. A stronger starting point is the proposed decision, the assumptions supporting it, and the risks that could change price, structure, or ability to complete.

Three questions that shape scope

  • What is the party actually acquiring or committing to?
  • Which risks could change the decision or its terms?
  • How should findings affect warranties, indemnities, price, and completion?

Outputs should be usable: the issue, possible effect, priority, recommended action, and owner. This turns diligence from a descriptive report into a decision tool.

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