Reading time: 3 minutes

In part 1 we explained what the due diligence process is, why it is important and how it is conducted.

In part 2, we will look at the information that needs to be provided in due diligence.

If you are the vendor, you need to be mindful of certain things when providing information in due diligence. The general considerations for a vendor disclosing information has been set out below.


It is common for vendors and purchasers to agree a materiality threshold in respect of the vendor’s disclosures so that the vendor can focus on providing only material information, rather than spending time on minor issues. This is something that needs to be discussed and agreed upon between the purchaser and vendor. For example, it can be agreed that only customer contracts with an aggregate value over $10,000 need to be provided, which means that any customer contracts under $10,000 need not be provided.

Commercially sensitive information

The vendor should ensure that it is comfortable disclosing all due diligence material that it intends to disclose, including ensuring that it does not disclose any information that it considers commercially sensitive or that was provided to it on a ‘commercial-in-confidence’ basis. For example, if the vendor is sensitive about disclosing customer names or pricing arrangements it may consider providing copies of the relevant documents with the sensitive information redacted.

If no confidentiality agreement has been entered into between the parties by this stage, a confidentiality agreement should be drafted and executed by the parties before the due diligence process commences. This is necessary to protect the vendor from the purchaser/s using confidential information disclosed in the due diligence process to compete.


Similarly, the vendor should also consider whether or not it is breaching privacy laws by disclosing any individuals’ personal information to the purchaser. If so, this information may need to be redacted.

Legal Professional Privilege

The vendor needs to be careful that it does not inadvertently ‘waive’ any legal professional privilege applying to any material by disclosing it to the purchaser, or referring to that material in a response to the purchaser.

For example, correspondence between the vendor and its lawyers (internal or external) may be subject to legal professional privilege, as well as any lawyer correspondence regarding potential or actual litigation. Legally privileged material should generally not be provided in the due diligence process.

Third Party Consent / Notification

The vendor may wish to ensure that it will not be in breach of an agreement, or of any law, by disclosing a particular document or certain information to the purchaser without obtaining the consent of a particular third party or notifying that third party of the disclosure. Your lawyers can assist with identifying any such restrictions.


The due diligence process is a very important process in any sale of business or M&A transaction. Whether you are a purchaser or a vendor, we strongly recommend that you seek assistance from experienced commercial lawyers. Your commercial lawyer can assist throughout the entire transaction, including the due diligence process, and provide you with valuable guidance.

If you are a purchaser looking to pay a significant amount of money to buy an existing business – next month we will be doing a 3 part series on the key areas to review in the due diligence process. Stay tuned!


Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards