Contract Glossary
Due Diligence
Definition
Due diligence is doing your homework before signing. It's the investigation you conduct, reviewing financials, checking legal history, verifying claims, to make sure the deal is what it claims to be.
In Practice
Before signing a $200,000 licensing agreement with a startup, you run due diligence. You check their incorporation documents, financial statements (are they burning cash?), existing contracts (any exclusivity deals that conflict?), IP ownership (do they actually own what they're licensing?), and litigation history (are they getting sued?). Skipping this to close faster is how you end up licensing technology from a company that doesn't own it.
Common in these contract types
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