Checking ownership, authority and obligations before a transaction closes is cheaper than unwinding it afterwards.
One of the most valuable functions of legal advice is helping a client identify problems before a transaction is completed. This is the purpose of legal due diligence.
Whether a person is buying land, entering a commercial agreement, investing in a business or undertaking another significant transaction, due diligence involves examining relevant information before making the final commitment.
A transaction may appear attractive on the surface.
However, there may be issues hidden within the documents or circumstances surrounding it.
For example:
Without proper investigation, a person may discover these issues only after committing money or resources.
There is no universal due-diligence checklist because the investigation depends on the transaction.
However, questions may include:
Some people avoid legal review because they believe it will slow down a transaction. But speed without adequate understanding can create much greater problems later.
The purpose of due diligence is to allow a party to make an informed decision.
The firm’s objective is to provide accessible and effective legal solutions while helping clients understand and protect their interests. This is particularly relevant to transactions where the client may not have the legal knowledge necessary to identify important risks independently.
Before asking, “How quickly can we complete this transaction?”, it is often worth asking:
“Do we understand exactly what we are committing ourselves to?”
That is where proper legal due diligence can make a difference.
This article is for general information and does not constitute legal advice.