Establishing secure connection…Loading editor…Preparing document…

Due Diligence Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

DUE DILIGENCE AGREEMENT

This Due Diligence Agreement (the Agreement) is made as of Effective Date: by and between Disclosing Party Name: with principal place of business at (the "Disclosing Party"), and Receiving Party Name: with principal place of business at (the "Receiving Party").

RECITALS

WHEREAS, the Disclosing Party possesses certain confidential, proprietary and non-public information concerning its business, operations, assets, liabilities and opportunities that may be relevant to the Receiving Party's evaluation of a potential business transaction or investment (the "Purpose");

WHEREAS, the Receiving Party desires to receive access to certain Confidential Information to evaluate the Purpose and the Disclosing Party is willing to disclose such information subject to the terms and conditions set forth herein;

WHEREAS, the parties desire to define their respective rights and obligations with respect to Confidential Information disclosed in connection with the Purpose.

NOW, THEREFORE

In consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 "Confidential Information" means all tangible and intangible information disclosed by the Disclosing Party to the Receiving Party, whether disclosed orally, visually, electronically or in writing, including but not limited to financial statements, business plans, customer and supplier lists, intellectual property, technical data, projections, contracts, software, source code, and information derived from such materials. Confidential Information does not include information that: (a) is or becomes publicly available through no breach of this Agreement by the Receiving Party; (b) is already in the Receiving Party's possession free of obligation of confidentiality as evidenced by written records; (c) is rightfully obtained from a third party without restriction and without breach of an obligation to the Disclosing Party; or (d) is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information.

1.2 "Representatives" means officers, directors, employees, agents, advisors, accountants and legal counsel of a party who have a legitimate need to know Confidential Information for the Purpose.

2. SCOPE OF DISCLOSURE AND USE

2.1 The Disclosing Party may disclose Confidential Information to the Receiving Party for the sole purpose of evaluating and negotiating the potential transaction described in the recitals (the Purpose). The Receiving Party shall use Confidential Information solely for the Purpose and shall not use Confidential Information for any commercial or competitive purpose other than evaluating the proposed transaction absent the Disclosing Party's prior written consent.

2.2 The Receiving Party shall limit disclosure of Confidential Information to its Representatives who need to know the information for the Purpose and who are bound by confidentiality obligations at least as protective as those set forth in this Agreement. The Receiving Party shall remain liable for any breach of this Agreement by its Representatives.

3. CONFIDENTIALITY OBLIGATIONS; TERM

3.1 The Receiving Party shall: (a) hold Confidential Information in strict confidence; (b) use at least the same degree of care to protect the Confidential Information as it uses to protect its own similar confidential information, but in no event less than reasonable care; and (c) not disclose Confidential Information to any third party except as expressly permitted in this Agreement.

3.2 Confidentiality Period: The obligations of confidentiality under this Agreement shall continue for a period of years from the date of disclosure of the Confidential Information, provided that trade secrets shall be held in confidence for so long as such information qualifies as a trade secret under applicable law.

3.3 Notwithstanding the foregoing, the Receiving Party may disclose Confidential Information to the extent required by applicable law or regulation or by order of a court or governmental body, provided that to the extent legally permitted the Receiving Party gives the Disclosing Party prompt written notice and, at the Disclosing Party's expense, reasonably cooperates with any efforts to obtain a protective order or other remedy to limit disclosure.

4. RETURN OR DESTRUCTION

Upon the Disclosing Party's written request or upon termination of discussions with respect to the Purpose, the Receiving Party shall, within days, return to the Disclosing Party all physical Confidential Information and destroy or permanently delete electronic Confidential Information, and shall certify in writing that such return or destruction has been completed, except that the Receiving Party may retain copies of Confidential Information as required by law or for archival purposes subject to the confidentiality obligations of this Agreement.

5. NO LICENSE; NO OBLIGATION TO PROCEED

Nothing in this Agreement grants any license, option, or other right under any patent, trademark, copyright, trade secret, or other intellectual property right of the Disclosing Party. Neither party shall be under any obligation to enter into any transaction or to disclose any specific information, and neither party shall be liable to the other with respect to any disclosure or non-disclosure of Confidential Information except as expressly set forth herein.

6. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants that it has full power and authority to enter into this Agreement and to perform its obligations hereunder. The Disclosing Party represents only that it believes the Confidential Information to be accurate as of the date disclosed; the Disclosing Party makes no other warranties, express or implied, including any warranty of merchantability or fitness for a particular purpose, and shall have no liability for any inaccuracies therein.

7. REMEDIES

The Receiving Party acknowledges that breach of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages may be an inadequate remedy. Accordingly, in addition to any other legal or equitable remedies, the Disclosing Party shall be entitled to seek injunctive relief to prevent any actual or threatened breach of this Agreement without the necessity of posting bond.

8. INDEMNIFICATION

The Receiving Party shall indemnify and hold harmless the Disclosing Party from and against any losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising out of or resulting from a breach of this Agreement by the Receiving Party or its Representatives.

9. NOTICES

All notices under this Agreement shall be in writing and delivered personally, by certified mail (return receipt requested), courier, or recognized overnight delivery service, or by email with confirmation of receipt, effective upon receipt.

10. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflicts of law principles. The parties submit to the exclusive jurisdiction of the state and federal courts located in that state for resolution of disputes.

11. ENTIRE AGREEMENT; SEVERABILITY

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written agreements and understandings. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

12. AMENDMENT; WAIVER; COUNTERPARTS

No amendment or modification of this Agreement shall be effective unless in writing and signed by both parties. Failure or delay by either party to exercise any right under this Agreement shall not operate as a waiver. This Agreement may be executed in counterparts, each of which shall be deemed an original, and facsimile or electronic signatures shall be binding.

13. ADDITIONAL PROVISIONS

13.1 Survival. The provisions of this Agreement that by their nature are intended to survive termination or expiration shall so survive.

13.2 Assignment. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party, except to a successor in interest in connection with a merger, acquisition or sale of all or substantially all assets.

PURPOSE DESCRIPTION

Disclosing Party:

By:

Date:

Receiving Party:

By:

Date:

Enter text✕
Prepare your document for signing right on this page
  • 01 Edit the text and complete the fields
  • 02 Click Sign Now and on the next screen add recipients and signature fields in SignNow
  • 03 Start your free trial to sign and send your doc
Sign Now

What a Due Diligence Agreement Covers

A Due Diligence Agreement documents the scope, timing, and confidentiality terms used when one party reviews another party's business, financial, legal, or technical records before a transaction. It defines what information may be requested, how it must be delivered, who may access it, limits on use and redistribution, and the period during which the due diligence process occurs. The agreement sets expectations about discovery windows, data protection measures, and remedies for breaches, and it often cross-references supporting schedules and exhibits that list requested documents or systems to be reviewed.

Why a Formal Agreement Matters

A Due Diligence Agreement protects confidential information, clarifies responsibilities, and reduces dispute risk during review periods.

Why a Formal Agreement Matters

Who Typically Prepares and Signs This Agreement

Parties and advisors who frequently use Due Diligence Agreements include the buyer or investor, the seller or target company, and their legal and financial advisors.

  • Private equity and investment teams performing target reviews during acquisitions and fundraising.
  • Corporate legal departments and outside counsel coordinating contract and compliance checks.
  • Lenders and acquirers conducting financial, tax, and regulatory assessments.

In many transactions, third-party auditors, accountants, or technical consultants are named as permitted recipients under confidentiality provisions.

Core Elements to Include in a Professional Due Diligence Agreement

A robust agreement defines scope, confidentiality, permitted uses, document lists, access protocols, timelines, and liability limits to limit ambiguity and protect sensitive data.

Scope

Specify categories of information to be reviewed, excluded topics, and the systems or locations where documents reside.

Confidentiality

Define confidentiality obligations, permitted disclosures to advisors, duration of confidentiality, and post-review return or destruction obligations.

Access and Delivery

State method of delivery (electronic data room, secure file transfer, physical inspection), authentication requirements, and any redaction standards.

Timeline

Set request windows, response deadlines, the overall due diligence period, and procedures for extension or dispute.

Representations

Include seller representations about accuracy of materials and a disclaimer of reliance where applicable.

Liability and Remedies

Spell out limitations on damages, injunctive relief for misuse, indemnities, and allocation of costs for third-party experts.

Step‑by‑Step: Completing a Due Diligence Agreement

Follow these steps in order to create a clear, enforceable agreement and begin the review process.

  • 01
    Draft scope: List documents and topics to be reviewed.
  • 02
    Set timing: Define response windows and overall due diligence period.
  • 03
    Establish controls: Specify delivery method and access rules.
  • 04
    Execute: Obtain signatures from authorized representatives.

How to Configure an Online Due Diligence Workflow

Set up digital workflows to manage requests, redactions, reviewer access, and evidence of delivery.

Field Configuration
Document Upload Require PDF/A or PDF, enable version control and virus scanning.
Access Control Use role-based permissions and two-factor authentication for external reviewers.
Audit Trail Capture timestamps, IP addresses, and user actions for each file.
Redaction Allow on-platform redaction with an audit log of redacted items.

Delivery and Electronic Submission Options

Choose platforms that meet your security, audit, and accessibility needs before sharing materials.

  • Integrations: Salesforce, NetSuite, Google Workspace compatibility
  • File Types: PDF, DOCX, XLSX supported
  • Authentication: Email link, SMS code, or advanced MFA

Ensure the chosen platform supports exportable audit trails, retention controls, and any regulatory compliance required by your industry.

Typical Online Due Diligence Flow

A standard digital workflow moves from request to access, review, and confirmation with an auditable trail at each step.

  • Request: Buyer issues a list of requested items.
  • Upload: Seller delivers materials via secure repository.
  • Review: Authorized reviewers inspect and annotate documents.
  • Acknowledgment: Parties confirm receipt and completion in writing.

Essential Information to Capture in the Agreement

Parties: Identify all entities involved
Effective Date: Agreement start date
Scope: List document categories
Access Method: Specify platform or delivery
Confidentiality: Define permitted use
Signatories: Authorized representative names

Common Timelines and Deadlines in Due Diligence

Standard agreements set clear deadlines for document delivery, review windows, and final reporting to keep the process on schedule.

Request Response Window:

Typically 7–21 days per request

Overall Due Diligence Period:

Often 30–90 days total

Extension Requests:

Mutual agreement required, specify notice period

Confidentiality Survival:

Commonly 2–5 years after termination

Dispute Notification:

Set short notice period, often 10–30 days

Key Milestones from Request to Close

Track numbered milestones so each party knows the critical checkpoints and who is responsible at each step.

01

Document Request Issued

Buyer sends a detailed list of required items.

02

Materials Delivered

Seller uploads documents to the agreed platform.

03

Review Complete

Buyer's team submits questions and notes.

04

Final Report

Buyer's findings summarized for decision‑making.

Common Preparation Mistakes to Avoid

  • Vague scope descriptions that create disputes over what must be produced and what is excluded.
  • Failing to specify permitted recipients and secondary disclosure limits for advisors and consultants.
  • Using inconsistent naming or redaction practices that prevent reliable audit records and chain-of-custody proof.
  • Omitting timeline details that lead to implicit expectations and missed contractual deadlines.

Typical Risks and Consequences of an Incomplete Agreement

Breach of Confidentiality: Potential injunctive relief and damages
Disputed Scope: Costly litigation or arbitration
Regulatory Exposure: Privacy violations may trigger fines
Transaction Delay: Missed closing deadlines
Data Loss Risk: Reputational and financial harm
Invalid Signatures: Enforceability challenges

Typical eSignature Pricing for Due Diligence Workflows

Compare common vendor entry points and a few feature considerations relevant to executing and preserving agreements digitally.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial, no credit card Varies by vendor Varies by vendor Free trial available Free trial available
Bulk Send Yes Yes Yes Yes No
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Real‑World Use Cases

Examples show how parties use Due Diligence Agreements across transaction types and how digital workflows support them.

Private Equity Review

A buyer establishes a 45‑day review window to inspect financials and contracts

  • The seller provides a secure data room with role‑based access
  • The agreement requires return or destruction of materials and preserves confidentiality for five years while enabling rapid decision making.

Healthcare Acquisition

An acquiring group needs patient‑related compliance documents and HIPAA assurances

  • The agreement includes a BAA and redaction rules
  • Documents are delivered via an encrypted repository with audit logs and a defined retention schedule to meet regulatory obligations.

Practical Tips for Accurate and Efficient Completion

Adopt consistent drafting and delivery practices to reduce friction and legal risk during reviews.

Be Specific
Define document categories and include exhibits to avoid later disputes over what must be produced.
Limit Recipients
Name roles or individuals allowed to access materials and require written acknowledgments of confidentiality.
Use Audit Logs
Capture timestamps, IP addresses, and user actions to provide an evidentiary trail in case of misuse.
Plan for Redaction
Implement standardized redaction protocols and retain unredacted originals under controlled access if needed.

Frequently Asked Questions

Answers to common procedural and legal questions about drafting, signing, and storing a Due Diligence Agreement.


Need help? Contact support

be ready to get more
Join over 28 million airSlate SignNow users
Sign Now
Company
Forms
Pricing
Resources
Knowledge base
Other Products
© 2026 airSlate Inc. All rights reserved.