Due Diligence is a phrase that’s commonly tossed around in the consumer world, but has a special meaning within the context of a legal dispute. In a broad sense, it refers to the level of judgment, care, prudence, and investigation that a person would reasonably be expected to do under particular circumstances. If a consumer hasn’t done his/her due diligence, it could mean the difference between winning and losing a case, and will pose challenges to being able to dispute the contract terms or performance of the contract.

In the legal world, Due Diligence actually means a complete and appropriate review of documentation and facts by a party, before purchasing a good/service, or engaging in business with another party. It is a full and complete review using the advice of professionals as needed, so that when one is done, one knows all there is to know, before buying or engaging in business.

Due Diligence IS NOT similar to kicking the tires on a car. Due Diligence IS similar to taking the car to a garage, having it checked out completely, and personally checking out every part that does not require the expertise of a mechanic.


  1. Who exactly is going to be entering into the agreement?
  2. What is the price/ consideration for the products or services?
  3. What exactly are the products or services to be delivered?
  4. When and where are the payments, products, or services to be delivered?
  5. How long is the term of the agreement? (One-time; Month-to-Month; A year etc.)
  6. What constitutes a default or non-performance under the contract?
  7. What is the cancellation policy or early termination policy?

At minimum, all consumers should be fully clear on the 7 terms listed above, before entering into any agreement. There is no real valid excuse under the law for not clarifying these basic questions prior to signing any contract. Depending on the type of contract or transaction, there might be many more questions needed to be asked. Do your due diligence accordingly.

In addition, the consumer is required to read the contract thoroughly (front and back) prior to signing it (or hire someone to help), to ensure that the verbally communicated terms are consistent with the written contract terms. Do your due diligence. The best time to challenge a bad contract is before entering into one!

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