Due diligence is a term used to describe the care and attention that someone takes when performing an action or making a decision. In legal contexts, it refers specifically to the process by which a person investigates and verifies information about another party before entering into a business transaction or agreement with them. This may involve reviewing financial records, checking references, conducting background checks, and assessing any potential risks associated with the deal. The goal of due diligence is to ensure that all relevant information has been considered so that an informed decision can be made.