ABSTRACT
Due diligence is a balancing act between cost and risk. Due diligence relies heavily on information from the seller and on access to the target's management, facilities and advisers. As parties rarely go to law over breaches of confidentiality, it is better to sign them and get on with the due diligence than waste a disproportionate time quibbling. A common due diligence problem is sheer volume of material available during the process, leading to useful information becoming concealed in irrelevant or unfocused data. One of the big benefits of a properly executed due diligence programme is that it highlights areas of uncertainty that can be ring-fenced by warranties, indemnities or other forms of protection. Most timetable issues are moveable and, indeed, by the time the discussions get round to due diligence timetables, the seller is so close to a deal that it would be foolish to alienate a prospective purchaser.
