Legal Due Diligence Report

---
name: legal-due-diligence-report
description: >-
  Prepare a source-grounded buy-side legal due diligence report for a U.S.
  acquisition, including limited-information and pre-LOI work, public-record
  research, evidence requests, specialist review, and analysis of how findings
  may affect transaction terms. Use for acquisition diligence, ETA or
  search-fund diligence, red flag reports, diligence request lists, and
  closing-readiness reviews.
license: CC-BY-4.0
metadata:
  author: open-agreements
  version: "0.1.0"
catalog_group: Legal Explainers
catalog_order: 30
---

# legal-due-diligence-report

Prepare a practical buy-side legal due diligence report focused on material
risks and their possible effect on the transaction. Read
`content/practice-guide.md` before planning or writing the report; it is the
bundled, source-cited canonical practice guide. Use this file as the operating
layer, not as a substitute source of legal doctrine.

## Set the mandate

Confirm or state reasonable assumptions about the buyer, target, proposed
structure, diligence stage, supplied evidence, materiality, intended audience,
deadline, and authorization for public or paid searches. If the structure is
unknown, compare the plausible structures and identify what would decide among
them.

Choose the depth that fits the evidence:

- **Limited-information or pre-LOI:** use supplied materials and lawful public
  sources, label seller claims, and make unresolved items explicit requests.
- **Full diligence:** reconcile the data room, public records, management
  answers, and specialist work against the proposed transaction structure and
  scope.
- **Refresh:** identify changes since the prior report and update the signing,
  closing, and post-closing action list.

## Define the transaction scope and review the evidence

Start with the legal actors, ownership, authority, transaction scope,
assets or equity expected to move, liabilities expected to transfer or remain,
financing, and signing-to-closing sequence. Then test the continuity of material
contracts, IP and technology, people, permits, real estate, regulated
operations, litigation, insurance, and financial claims that affect the deal.

For every material proposition, distinguish buyer- or seller-supplied
documents, seller or management assertions, official public records,
third-party public sources, and reviewer calculations or inferences.

Use a consistent evidence status: **confirmed**, **seller-asserted**,
**contradictory**, **incomplete**, **not searched**, **access restricted**, or
**fee or authorization required**. Never convert a failed search or a no-result
search into a conclusion that a lien, claim, registration, or filing does not exist.

## Research and inaccessible evidence

When internet access is available, search as broadly as the material facts
warrant and prefer official sources. Keep a public-search log with the database,
query, names and jurisdictions searched, URL, date, result, limitation, and
retrieved artifact. Public research may include entity, UCC, court, agency,
USPTO, Copyright Office, domain, sanctions, permit, and property sources.

Do not incur fees, create accounts, accept attestations, contact third parties,
or order records without authorization. When evidence is blocked by a CAPTCHA,
paywall, account, identity requirement, or unavailable interface, record the
exact limitation, identify a lawful alternative, and request the record or
authorization needed to finish the analysis.

## Assess findings

For each material finding, state:

1. the issue and evidence status;
2. the supported facts and source citations;
3. why it matters to this transaction and structure;
4. the missing predicate or uncertainty;
5. the recommended next evidence or specialist review; and
6. possible responses, depending on materiality and the negotiated terms:
   structure, price, representation, covenant,
   condition, consent, payoff, escrow, indemnity, insurance, closing deliverable,
   or post-closing action.

Do not assign a dollar exposure or red/yellow/green rating without an explained
basis. Do not state a legal conclusion whose governing law or factual predicate
has not been established.

## Required report structure

Unless the user requests a different format, deliver:

1. executive decision summary;
2. proposed transaction structure, scope, and deal points;
3. prioritized issues and analysis;
4. scope, evidence, assumptions, and financial-period reconciliation;
5. requests, authorizations, and matters for specialist review;
6. signing, closing, and post-closing action list; and
7. public-search log.

Use tables when they make status, ownership, dependencies, or reconciliation
clearer. Label seller assertions at the point of use. Keep citations adjacent to
the proposition they support. State that the report is not a legal opinion or
investment recommendation.

## Boundaries

This skill organizes evidence and legal issues. It does not replace deal
counsel, tax advice, a quality-of-earnings review, technical or cybersecurity
testing, title or lien searches, environmental work, benefits analysis, or
other specialist review. Never publish or transmit a report, contact a target
or third party, make a filing, or spend money without express authorization.

Check `manifest.json` for the snapshot date, source commit, and canonical URL.
If currency matters, offer to verify the current canonical guide and primary
sources without sending confidential deal facts upstream.