Due diligence is an investigation conducted prior to signing an agreement to evaluate risk. It involves assessing legal, commercial, and financial aspects of a target company. A due diligence team investigates matters like contracts, disputes, assets, and compliance. The level of investigation can vary from exceptions-only to long-form reports. The goal is to identify risks and make an informed acquisition decision. Due diligence helps protect against claims later but has limits based on available information. Approaches differ around the world, with some favoring more or less documentation and diligence.