Indemnity is limited by a set of interlocking provisions, and their interaction determines recovery.
Survival. How long representations remain claimable. General representations commonly twelve to twenty-four months; fundamental representations — organisation, authority, capitalisation, title — for a longer period or the limitation period; tax and environmental on their own schedule. Survival provisions are generally enforced as contractual limitation periods.
De minimis. Individual claims below a threshold do not count at all.
Basket. An aggregate threshold before any claim is payable. A deductible basket pays only the excess; a tipping basket pays from the first dollar once crossed. The difference is substantial and is sometimes agreed without either side noticing which they chose.
Cap. A ceiling on aggregate indemnity, commonly a percentage of the purchase price for general representations, with fundamental representations capped at the purchase price and fraud uncapped.
Materiality scrape. Disregards materiality qualifiers for the purpose of determining breach, damages, or both. A double scrape is buyer-favourable and increases claim volume, which is why baskets and scrapes are negotiated together.
Exclusive remedy, subject to fraud, injunctive relief and the price adjustment.