How does due diligence differ from due care Why are both important Essay

How does due diligence differ from due care Why are both important - Essay Example nd, is most often defined as the test of liability for negligence whenever there is a question as to whether a person acted in an ordinary and reasonable manner in terms of certain instances considered to be an issue at the time. Each person who enters into a business arrangement, negotiation, or contract usually based upon certain everyday concerns that can be addressed without having to take extra ordinary measures. Due care insures that the agreement was not entered into in a haphazard manner by either party and that the contract or arrangement does not have any adverse effect on the parties concerned. Both due diligence and due care are important aspects of contractual agreements because these two factors, once proven to exist in any contract, could be used to negate or void any agreement based upon legal standards. It is therefore imperative that both parties entering into any agreement ensure that due care and diligence are properly exercised in the creation of the contract and its terms and