Due diligence describes the processes undertaken to ensure that a party has the requisite information that will affect that party’s decision making in relation to a transaction. For example, a party giving a loan to another may wish to perform due diligence as to:
- the purpose of the loan (e.g. viability of a business);
- enforceability of securities offered (e.g. whether there are other claims of higher priority); and
- suitability of the borrower (e.g. bankruptcy checks etc.).
The level of due diligence appropriate to a transaction will depend on the nature and specific circumstances of that transaction, weighed against the level of risk management that the client wishes to undertake.
The due diligence process provides greater comfort to the client that all relevant information has been considered before completing a transaction and reduces the probability of greater costs being incurred in subsequent legal action or losses suffered due to any misrepresentations.
Rowe Bristol Lawyers is experienced in advising and assisting clients with respect to the process of due diligence, including:
- considering and advising on contracts governing a transaction;
- considering and advising on relevant third party legal documents, such as supplier contracts, loans, guarantees, franchise agreements etc. that would affect the commerciality of a contract;
- considering and advising on the validity and enforceability of security being provided, including prior mortgages and caveats registered on real property offered as security;
- considering commercial documents when necessary and liaising with third party advisers such as accountants or independent valuers; and
- conducting searches of records maintained by regulatory agencies, such as searches of the records maintained by the Australian Securities and Investments Commission, the Australian Financial Security Authority, Landgate, the Department of Mines and Petroleum and the Personal Properties Securities Register.
If you require legal advice in relation to due diligence, please contact us to arrange a meeting so that we may consider your specific circumstances.
The above information is provided as general information only and should not be relied upon as legal advice. The accuracy of this information may have changed from the date when it was published.