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Alex Denne
Growth @ Ƶ | Introduction to Contracts @ UCL Faculty of Laws | Serial Founder

An Example Step-by-Step Due Diligence Process (Company Acquisition)

9 Jun 2023
32 min
Text Link

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Due diligence is an integral part of any business transaction, in particular the acquisition of a company. It is essential to carry out due diligence to assess the accurate value of the company and to uncover any potential risks that may present themselves during the acquisition. Without proper due diligence, it can be impossible to guarantee a successful outcome from an acquisition.

The Ƶ team are highly experienced when it comes to due diligence and understand how important it is as part of the process. Due diligence provides an opportunity for us to scrutinise all legal, financial and operational information about the target company, including their financial statements, customer contracts and other materials which have been gathered during this stage. This enables us to identify possible problem areas or liabilities which may arise during the acquisition as well as any advantageous opportunities that may exist.

It is also beneficial for verifying information provided by the target company - something which cannot be overlooked if we are going to make sure that this deal goes ahead without incident or delay. Performing due diligence ensures that all parties involved in the purchase can agree that they have made an informed decision based on accurate information and that everything is above board before signing on any dotted lines.

Utilising our expert knowledge affords us a further advantage by enabling us access our community template library which contains millions of data points; teaching our AI what constitutes market standard protocols when it comes to due diligence processes. Not only does this help our users draft high quality legal documents but you’re also able to customise them at no extra cost with no need for a costly lawyer’s fee!

Ƶ provide free step-by-step guidance through each stage of your due diligence process so no matter your level of expertise you can access essential documentation at every turn - read on below for more information on how you can instantly access our template library today!

Definitions

Scope of Acquisition - The area of focus for the acquisition, which includes the type of business, geographic location, size of the target company, and the expected financial return.

Timeline - A plan that outlines when each step in the acquisition process should be completed.

Financials - Documents such as income statements, balance sheets, and cash flow statements that provide information about a company’s financial health.

Competitive Position - A company’s place in relation to its competitors in terms of market share, customer base, and advantages/disadvantages.

Corporate Culture - The values, goals, and organizational structure of a company.

Cost of Acquisition - The purchase price, financing costs, legal fees, and other associated costs of the acquisition.

Financial Analysis - Examining a company’s financials to understand its financial health and identify any potential risks.

Return on Investment - The profit or loss resulting from an investment.

Applicable Laws - Laws and regulations that may affect the acquisition process.

Tax Implications - The taxes that will be due as a result of the acquisition.

Legal Obligations - Contracts, corporate governance requirements, and other legal matters that must be followed.

Existing Contracts - Valid agreements that do not contain any potential liabilities.

Potential Liabilities - Claims that may arise as a result of the acquisition.

Due Diligence Investigations - Verifying financial information, reviewing intellectual property, and examining the target company’s operations.

Purchase Agreement - An agreement outlining the terms and conditions of the acquisition.

Formalizing - Making an agreement official by signing it and obtaining necessary approvals.

Transaction Documents - Documents that contain all of the necessary information for the agreement.

Distributing Funds - Transferring money and assets to the appropriate parties.

Contents

  1. Establishing the Goals of the Acquisition
  2. Defining the scope of the acquisition
  3. Developing a timeline
  4. Researching the Target Company
  5. Gathering financials and other related documents
  6. Assessing the target company’s competitive position
  7. Understanding the target company’s corporate culture
  8. Conducting a Financial Analysis
  9. Estimating the cost of the acquisition
  10. Analyzing the target company’s financials
  11. Forecasting the return on investment
  12. Understanding Legal and Regulatory Issues
  13. Identifying applicable laws
  14. Determining tax implications
  15. Understanding the target company’s legal obligations
  16. Reviewing Contractual Obligations
  17. Examining existing contracts
  18. Identifying potential liabilities
  19. Completing Due Diligence Investigations
  20. Verifying financial information
  21. Reviewing intellectual property
  22. Examining the target company’s operations
  23. Negotiating the Purchase Agreement
  24. Setting the purchase price
  25. Developing an agreement outline
  26. Negotiating the terms of the agreement
  27. Closing the Acquisition
  28. Formalizing the purchase agreement
  29. Obtaining necessary approvals
  30. Finalizing the transaction documents
  31. Distributing funds and assets

Get started

Establishing the Goals of the Acquisition

  • Brainstorm potential goals for the acquisition and narrow them down to the most important ones
  • Create a list of the top goals for the acquisition and rank them in order of priority
  • Establish a timeline for completion of the acquisition
  • Establish a budget for the acquisition
  • Set a target date for completion of the acquisition
  • Identify any stakeholders who need to be informed of the acquisition
  • When all goals are established and agreed upon, check off this step and move on to the next.

Defining the scope of the acquisition

• Identify the assets, liabilities and other considerations that need to be included in the acquisition.
• Create a list of key personnel that need to be involved in the due diligence process.
• Determine the type of due diligence that will be conducted (e.g. financial, legal, operational, etc.).
• Create a checklist of due diligence topics to be addressed.
• Develop an information request list to obtain relevant information.
• Decide who will be responsible for collecting, organizing and verifying the information.

Once you have identified the assets, liabilities and other considerations that need to be included in the acquisition and have created a list of key personnel to be involved in the due diligence process, you can check this off your list and move on to the next step.

Developing a timeline

  • Create a timeline for the due diligence process and share it with the stakeholders involved in the acquisition.
  • Develop a timeline that clearly outlines each step in the due diligence process and milestones, as well as an overall timeline for the whole process.
  • Incorporate deadlines for completion of due diligence activities and benchmarks for decisions.
  • Make sure to include contingencies to account for any potential delays or issues that might arise.
  • Review and adjust the timeline as needed in light of any new information or changes in the process.

How you’ll know when you can check this off your list and move on to the next step:

  • When the timeline is agreed upon by all stakeholders and any contingencies have been addressed, it is ready to be used in the due diligence process.

Researching the Target Company

  • Research and review the target company’s public filings, including SEC documents and financial statements
  • Research and review company’s website, press releases, and other public information
  • Research and review target company’s competitive positioning in the marketplace
  • Research and review target company’s customers, suppliers, and other third-parties
  • Research and review target company’s organizational structure, management team, and advisors
  • Research and review target company’s industry and competitive landscape

When you can check this off your list and move on to the next step:

  • Once you have a thorough understanding of the target company, its competitive positioning, and the industry in which it operates, you can move on to the next step.

Gathering financials and other related documents

  • Request copies of the target company’s financial statements, including balance sheet, income statement, cash flow statement, and statement of shareholders’ equity.
  • Request copies of the target company’s most recent tax returns.
  • Request copies of any other relevant documents, such as customer contracts, supplier contracts, and leases.
  • Request copies of any documents related to legal proceedings, such as lawsuits.
  • Confirm the accuracy of all the requested documents.

When you have successfully gathered all the financials and other related documents, you can move on to the next step, which is assessing the target company’s competitive position.

Assessing the target company’s competitive position

  • Research the target company’s positioning in the market, and identify potential competitors
  • Compare the target company’s products and services to competitors’, and assess their relative strengths and weaknesses
  • Research customer feedback and reviews for the target company and its competitors
  • Analyze the target company’s pricing strategy and how it compares to its competitors
  • Gather information on the target company’s customer base and analyze how it compares to competitors

When you have completed the above steps, you will have a good understanding of the target company’s competitive position in the market. You can then check this off your list and move on to the next step: understanding the target company’s corporate culture.

Understanding the target company’s corporate culture

  • Identify key personnel and understand their roles in the company
  • Speak to employees, customers and suppliers to get an understanding of the company’s culture
  • Assess the quality and effectiveness of the management team
  • Gather information about the company’s internal processes, procedures, values and goals
  • Review the company’s public statements, such as annual reports, press releases, and public filings
  • When you feel confident you have a good understanding of the company’s culture and values, you can move on to the next step.

Conducting a Financial Analysis

• Assess the financial stability of the target company by analyzing their balance sheets, income statements, and cash flow statements.
• Review the target company’s debt and equity capital structure, as well as their historical performance.
• Evaluate the target company’s ability to generate cash and to service any debt obligations.
• Analyze the target company’s financial performance relative to their industry peers.
• Identify any potential financial risks associated with the target company.

When you have completed this step, you should have a better understanding of the target company’s financial situation and potential risks. You should also be able to assess the target company’s ability to generate cash and service any debt obligations.

Estimating the cost of the acquisition

  • Research and review the target company’s assets and liabilities
  • Obtain appraisals for any tangible assets the target company has
  • Calculate the cost of any labor and materials needed to acquire the target company
  • Calculate the cost of any taxes that will be incurred with the acquisition
  • Consider the cost of any other liabilities related to the acquisition
  • Calculate the total cost of the acquisition
  • When you have taken into account all of the above costs, you will have an estimate of the cost of the acquisition and can move on to the next step.

Analyzing the target company’s financials

  • Obtain the target company’s up-to-date financial reports
  • Analyze the target company’s financials for the past 3 years, including income statements, balance sheets and cash flow statements
  • Assess the target company’s profitability, liquidity, and solvency ratios
  • Compare the target company’s financials to those of competitors in the same industry
  • Identify any areas of financial concern
  • Check if the financials reflect any legal or tax issues

You can check this off your list and move on to the next step once you have obtained the target company’s financial reports, analyzed them, compared them with competitors in the same industry, identified any areas of financial concern, and checked for any legal or tax issues.

Forecasting the return on investment

  • Analyze the potential return on investment for the target company including cost savings, revenue gains, tax implications, and other possible benefits
  • Examine the target company’s current financials to determine which areas need to be improved to achieve the expected ROI
  • Run scenarios on the potential performance of the target company to estimate its return on investment
  • Use data from the due diligence process to refine the forecast of the target company’s potential return on investment
  • Evaluate the return on investment forecast against the expected investment and expected financials to determine if the acquisition is worth pursuing

Once you have analyzed the potential return on investment for the target company, you can move on to the next step in the due diligence process.

Understanding Legal and Regulatory Issues

  • Review the target company’s documents, such as the articles of incorporation, to identify any relevant laws or regulations.
  • Consult with an attorney to identify any applicable laws or regulations that may affect the acquisition.
  • Review any applicable laws, regulations, and other compliance documents related to the acquisition.
  • Identify any potential antitrust, securities, or other legal issues that may arise from the acquisition.

You can check this off your list and move on to the next step when you have reviewed the target company’s documents, consulted with an attorney, and identified any potential legal issues that could affect the acquisition.

Identifying applicable laws

  • Research the laws and regulations that apply to the company’s operations, such as local, state, and federal laws.
  • Consult with legal counsel to gain a better understanding of the applicable laws and potential risks associated with the acquisition.
  • Create a list of all relevant laws and regulations and any potential risks associated with noncompliance.
  • Once you have identified all the applicable laws and regulations, you can check this step off your list and move on to the next step.

Determining tax implications

  • Analyze documents from the target company to determine the tax implications of the acquisition, including potential liabilities, deductions, and credits
  • Have an accountant or tax advisor review the documents and explain the potential tax implications
  • Calculate the potential tax impact of the proposed acquisition
  • Make sure that the proposed acquisition does not negatively impact the acquirer’s tax situation
  • Make sure to review any existing tax agreements between the acquirer and the target company
  • Make sure to review any applicable state or federal tax laws and regulations
  • Consider the potential impact of any applicable tax incentives
  • Make sure to consider the potential impact of the acquisition on the target company’s current tax situation

Once you have completed the analysis of the tax implications, you will be ready to move on to the next step of the due diligence process.

Understanding the target company’s legal obligations

  • Research and review the target company’s legal obligations, such as compliance with federal, state, and local laws and regulations.
  • Identify any pending or outstanding legal disputes or liabilities that may have an impact on the acquisition.
  • Consult with legal counsel to assess any potential risks associated with the company’s legal obligations and liabilities.
  • Document any findings or potential risks in an acquisition report.

Once you have identified and documented the target company’s legal obligations and liabilities, you will have completed this step and can move on to reviewing contractual obligations.

Reviewing Contractual Obligations

  • Review all existing contracts the target company is obligated to, including lease agreements, employment contracts, and supply contracts
  • Look into any outstanding litigation or arbitration proceedings
  • Assess the existing contracts to determine if they are compliant with current laws and regulations
  • Identify any potential risks or liabilities associated with the existing contracts
  • Determine the terms of the contract and if they are feasible
  • Analyze the terms of the contract to determine if any changes need to be made

When you have reviewed the contractual obligations, you can check this off your list and move on to the next step.

Examining existing contracts

  • Review existing customer contracts and determine the type and scope of each
  • Make a list of all contracts, including the type and scope of each
  • Confirm customer contracts and any other obligations are in place
  • Confirm that all contracts are up to date and in compliance with applicable laws
  • Assess customer contracts and determine if they are profitable and sustainable
  • Identify any potential risks or liabilities associated with the contract
  • Assess if there are any contract termination clauses or other potential pitfalls

Once you have reviewed existing customer contracts and determined the type and scope of each, you can check this off your list and move on to the next step in the due diligence process.

Identifying potential liabilities

  • Identify any existing legal liabilities that the target company may have, such as existing lawsuits, claims, and debts.
  • Research the target company’s business operations, assess the financial health of the company, and investigate any potential legal liabilities.
  • Request copies of the target company’s financial statements, including balance sheets and statements of income, to assess the company’s financial stability.
  • Request a copy of the target company’s insurance policies and review them to identify any potential liabilities.
  • Consult with legal counsel to identify any potential legal liabilities.
  • Evaluate the target company’s contracts to identify any potential liabilities.

How you’ll know when you can check this off your list and move on to the next step:

  • When you have identified any existing legal liabilities, researched the target company’s business operations, assessed the financial health of the company, and investigated any potential legal liabilities; requested copies of the target company’s financial statements, including balance sheets and statements of income, to assess the company’s financial stability; requested a copy of the target company’s insurance policies and reviewed them to identify any potential liabilities; consulted with legal counsel to identify any potential legal liabilities; and evaluated the target company’s contracts to identify any potential liabilities, you can have a better understanding of the target company’s legal liabilities, and you can move on to the next step of completing due diligence investigations.

Completing Due Diligence Investigations

• Collect and review all relevant documents and records related to the target company. This includes financial statements, tax returns, employee records, contracts, legal documents, and more.
• Check the records for accuracy and completeness. Also investigate any discrepancies or inconsistencies.
• Check the target company’s reputation. Talk to customers, suppliers, and other stakeholders.
• Conduct a thorough analysis of the target company’s operations, infrastructure, and finances.
• Determine the target company’s market share and competitive position.
• Verify the target company’s assets and liabilities.
• Ensure that the target company complies with all legal requirements.

Once you have collected and verified all relevant documents, records, and information related to the target company, you can check this off your list and move on to the next step.

Verifying financial information

  • Obtain financial statements from the target company for the last three years.
  • Analyze the financial statements to ensure accuracy and identify any irregularities.
  • Compare financial information with the target company’s tax returns to ensure accuracy and integrity.
  • Assess the company’s liquidity, profitability, and financial stability.
  • Consider any off-balance sheet items that may be hiding financial issues.
  • Investigate any discrepancies between the financials and the company’s actual operations.

You will know that you have completed this step when you have thoroughly analyzed the financial statements and validated the accuracy of the information.

Reviewing intellectual property

  • Obtain access to the target company’s intellectual property portfolio including patents, trademarks, copyrights, and trade secrets.
  • Review the target company’s intellectual property portfolio to determine its full value.
  • Identify any potential infringements on the target company’s intellectual property.
  • Investigate any potential infringements to determine the severity of the infringement.
  • Negotiate with any infringers to resolve the issue.
  • Determine the target company’s intellectual property registration strategy and implementation.

You will be able to check off this step and move on to the next when you have reviewed the target company’s intellectual property portfolio, identified any potential infringements, and determined the target company’s intellectual property registration strategy and implementation.

Examining the target company’s operations

  • Analyze the target company’s financial statements, such as its balance sheet, income statement, and cash flow statement
  • Analyze the target company’s organizational structure, operations and management
  • Analyze the target company’s customer base and its customer retention level
  • Analyze the target company’s competitive landscape and market position
  • Analyze the target company’s technology and systems infrastructure
  • Analyze the target company’s regulatory compliance record

When you can check this off your list and move on to the next step:

  • When you have gathered enough information to make an informed decision on the acquisition.

Negotiating the Purchase Agreement

  • Carefully review the target company’s due diligence documents and financials
  • Prepare a draft agreement outlining the terms of the acquisition
  • Negotiate the purchase agreement with the seller and their legal counsel
  • Ensure that appropriate representations and warranties are included in the purchase agreement
  • Address any additional matters that need to be included in the agreement
  • Finalize and execute the purchase agreement

Once the purchase agreement has been finalized and executed, you can move on to the next step of setting the purchase price.

Setting the purchase price

  • Research the company’s market value, competitive industry, and relevant financial information
  • Estimate the company’s fair market value and decide the purchase price
  • Take into account due diligence costs and the estimated returns of the acquisition
  • Negotiate the purchase price with the seller and come to an agreement
  • Once both parties have agreed upon the purchase price, this step is complete and you can move on to Developing an Agreement Outline.

Developing an agreement outline

  • Identify the key terms of the agreement, such as purchase price, payment method, timeline, and delivery of goods/services.
  • Develop an agreement outline that includes all the relevant information necessary for the transaction, such as the purchase price, payment method, timeline, and delivery of goods/services.
  • Seek legal advice to ensure that the agreement complies with all applicable laws and regulations.
  • Identify any potential risks associated with the transaction and include appropriate provisions in the agreement to address those risks.
  • Draft the agreement and provide it to the other party for review and negotiation.

You’ll know you can move on to the next step when the agreement is finalized and both parties have signed it.

Negotiating the terms of the agreement

  • Identify key terms and conditions to the agreement
  • Negotiate key terms and conditions with the other party
  • Draft and revise the agreement until both parties are satisfied with the terms
  • Document the agreed-upon terms in a written agreement
  • Review and sign the written agreement

You will know you can move on to the next step when both parties have agreed on the terms and conditions of the agreement and have signed the written agreement.

Closing the Acquisition

  • Obtain transfer documents from target company and review for accuracy
  • Ensure all conditions precedent to closing are satisfied
  • Sign closing documents
  • Make closing payment to target company
  • Notify relevant parties, such as shareholders, lenders, and other stakeholders
  • Prepare closing checklist and obtain signatures
  • Establish post-closing governance and document management systems

You’ll know you can check this step off your list when all closing documents have been signed, the payment has been made, and all relevant parties have been notified.

Formalizing the purchase agreement

  • Draft a formal purchase agreement that includes all of the terms and conditions of the acquisition
  • Include the price of the acquisition, the method of payment and any contingencies that must be met
  • Negotiate the purchase agreement with the other party
  • Have both parties sign the purchase agreement
  • When both parties have signed the purchase agreement, you can check this step off your list and move on to the next step.

Obtaining necessary approvals

  • Review the purchase agreement with legal counsel to ensure all conditions are met
  • Submit the purchase agreement and proposed terms of the transaction to the board of directors for review and approval
  • Negotiate and finalize any additional terms or changes as needed
  • Obtain the board’s approval of the purchase agreement and proposed terms
  • When the board has approved the purchase agreement and terms, you can check this off your list and move on to the next step.

Finalizing the transaction documents

  • Work with external legal counsel to draft the purchase agreement and other closing documents
  • Finalize the purchase agreement and all other closing documents with the seller
  • Negotiate and agree with the seller on all remaining issues
  • Exchange executed copies of the purchase agreement and all other closing documents
  • Confirm that all outstanding conditions of the purchase agreement have been satisfied
  • When all parties have signed off on the purchase agreement and all other closing documents, the transaction is complete and ready to be closed.

Distributing funds and assets

  • Verify that all closing documents have been executed and submitted
  • Transfer funds from the buyer to the seller as per the closing documents
  • Make sure all assets subject to the transaction have been transferred from the seller to the buyer
  • Notify the buyer and the seller that the assets have been transferred
  • Confirm that all assets have been transferred in accordance with the closing documents
  • Check that the seller has released all liens, encumbrances, and security interests in the assets subject to the transaction
  • Notify the buyer and the seller that all assets have been successfully transferred
  • Check that all closing documents have been reviewed and approved by the buyer and the seller
  • Once all funds and assets have been transferred, the due diligence process is complete and the transaction is complete

FAQ

Q: How do I identify the specific legal requirements for a company acquisition?

Asked by Gabriel on April 2nd 2022.
A: Identifying the specific legal requirements for a company acquisition will depend on the jurisdiction of the transaction. It is important to familiarise yourself with the local laws, regulations and any applicable industry standards that may apply to the transaction. Depending on the specifics of the transaction, you may need to consult with a local lawyer or other professional who is familiar with the laws and regulations in the relevant jurisdiction. Additionally, if there are multiple jurisdictions involved in the transaction, it may be necessary to consult with professionals in each jurisdiction to ensure compliance.

Q: What are some of the key considerations during a due diligence process?

Asked by Elizabeth on August 5th 2022.
A: During a due diligence process, there are a number of key considerations that must be taken into account. These include assessing the target company’s financials, reviewing their management and operations, understanding their legal structure, evaluating their intellectual property, establishing their tax position and considering any potential liabilities or issues that need to be addressed. Additionally, it is important to assess the target company’s market position as it relates to their competition and industry trends. Ultimately, the due diligence process should provide an accurate picture of the target company’s business and financial situation before making an offer for its acquisition.

Q: What are some of the key documents involved in a due diligence process?

Asked by Emma on May 20th 2022.
A: During a due diligence process, there are a number of key documents that need to be reviewed in order to gain an accurate understanding of a target company’s operations and financials. These documents typically include financial statements such as balance sheets and income statements; corporate documents such as articles of incorporation; contracts and agreements; customer lists; intellectual property records; liability records; tax returns; and any other relevant documents pertaining to the target company’s operations or financials. Additionally, if there are multiple jurisdictions involved in the transaction, it may be necessary to consult with professionals in each jurisdiction to ensure compliance with applicable laws or regulations.

Q: How do I evaluate a target company’s intellectual property?

Asked by Noah on October 15th 2022.
A: Evaluating a target company’s intellectual property is an important step in any due diligence process. This involves assessing their existing IP assets such as patents, trademarks, copyrights, trade secrets, and any other IP assets that they may own or have rights to use. Additionally, it is important to assess whether any third parties have claims against these IP assets or whether there are any potential conflicts that need to be addressed before an acquisition takes place. Finally, it is important to ensure that all applicable IP rights are adequately registered and enforced in order for them to be effectively protected from infringement or misuse.

Q: How can I assess a target company’s market position?

Asked by Matthew on September 10th 2022.
A: Assessing a target company’s market position is an essential part of any due diligence process. This involves researching their current market share, understanding their competitive landscape, evaluating their pricing strategies and customer base, analyzing their product offerings and evaluating any recent market trends that may impact their business performance going forward. Additionally, it is important to assess how well-positioned they are given current market conditions and how this might impact both short-term and long-term performance of their business operations following an acquisition.

Q: What risks should I consider during a due diligence process?

Asked by Michael on February 8th 2022.
A: During a due diligence process it is important to consider any potential risks associated with acquiring a target company. These risks can include financial risks such as undisclosed liabilities or unexpected costs; operational risks such as inadequate management processes or customer service issues; legal risks such as non-compliance with applicable laws or regulations; reputational risks such as negative publicity or customer dissatisfaction; strategic risks such as new competition entering the market or shifts in customer demand; and other risks related to technology or intellectual property ownership that may become apparent during the review process. It is important to identify these potential risks early on so that they can be mitigated prior to completing the acquisition transaction.

Q: How do I evaluate a target company’s tax position?

Asked by Sophia on November 19th 2022.
A: Evaluating a target company’s tax position is an essential part of any due diligence process as it can have significant implications for both parties involved in an acquisition transaction. This involves reviewing any existing tax filings for accuracy and understanding any potential tax liabilities that may arise from completing the transaction. Additionally, it is important to review any potential tax benefits available given current laws and regulations related to acquisitions in order for both parties to make informed decisions regarding their respective tax obligations going forward. It may also be necessary to consult with local tax professionals in order to ensure compliance with applicable laws and regulations when completing an acquisition transaction.

Q: What contractual agreements should I consider during due diligence?

Asked by Benjamin on March 13th 2022.
A: During due diligence it is important to review all relevant contractual agreements associated with a potential acquisition transaction so that both parties understand their rights and obligations going forward. This includes reviewing existing contracts between the target company and its customers or suppliers; employment contracts between the target company and its employees; lease agreements for any properties owned by the target company; loan documents related to any existing debt obligations; partnership agreements related to joint ventures or shared ownership structures; and any other relevant agreements that could impact either party following completion of an acquisition transaction. It is also important for both parties understand how these contractual agreements will be impacted by completing this transaction so that all parties can make informed decisions going forward.

Example dispute

Suing a Company for Negligence in Due Diligence

  • Demonstrate that the company had a duty of care to use due diligence when entering into a transaction.
  • Show that the company breached this duty of care by failing to carry out due diligence or by carrying out inadequate due diligence.
  • Prove that the company’s breach of duty was the cause of the damages suffered by the plaintiff.
  • Demonstrate the amount of damages incurred by the plaintiff, including any economic losses or non-economic losses.
  • Consider any potential defenses that the company may raise, such as contributory negligence or the statute of limitations.
  • Determine if settlement is a viable option and if so, what an appropriate settlement amount might be.

Templates available (free to use)


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Due Diligence Seeking Aim Admission Information Request
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Due Diligence Share Purchases Information Request Short






Employment Due Diligence Report Acquisitions




Simple Supplier Questionnaire On Supply Chain Due Diligence Msa 2015

Voluntary Statement On Supply Chain Due Diligence For Companies Not Covered By Section 54 Of The Msa 2015

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