What is due diligence in a Dutch M&A transaction?

Dutch term: Due diligence | Legal basis: Freedom of contract + duty of disclosure

Due diligence in a Dutch M&A context is the buyer's investigation of the target company before completing the acquisition. Dutch law does not impose a statutory due diligence obligation, but the buyer's knowledge obtained (or that should have been obtained) during due diligence affects the scope of warranty claims against the seller after closing.

Under Dutch law, the seller has a duty to disclose material information (mededelingsplicht) and the buyer has a duty to investigate (onderzoeksplicht). The interaction between these duties determines the allocation of risk for issues discovered after closing. If the seller failed to disclose a material fact, the buyer may have a warranty claim or a claim for mistake (dwaling). If the buyer failed to investigate an issue that was apparent from the due diligence materials, the buyer may lose the right to claim.

Why it matters for international businesses

For international buyers, Dutch due diligence follows similar practical patterns to other jurisdictions, but the legal framework for post-closing warranty claims is shaped by the specific Dutch rules on disclosure and investigation duties.