Due diligence

The careful investigation and analysis that should be done before making a business decision or entering into an agreement.

This legal term originated in the 1930s in U.S. securities law, specifically in the Securities Act of 1933. It referred to the investigation that underwriters and others were required to perform before offering securities for sale. The phrase combined 'due' (meaning owed or required) with 'diligence' (careful attention), creating a legal standard of care.