Can a buyer recover twice for the same shortfall — once through a purchase-price adjustment and again through an indemnity claim?

The rule

There is no statute here, and this is a construction question, full stop: what does the purchase agreement say about the relationship between the price-adjustment mechanism and the indemnity? Two clauses usually do the work. A working-capital adjustment article states it is intended to true up the price for balance-sheet items measured as at closing — language courts read as fixing what the parties agreed the business was worth at closing, not as resolving whose fault a shortfall was. A no-duplication sentence, often buried in the general indemnity article, then bars indemnification “to the extent” a Loss was already reflected as a price reduction.

Where a specific receivable write-down in the completion accounts and an indemnity claim are traceable to the identical shortfall, a no-duplication clause catches it squarely on ordinary principles of contract interpretation — it is not a limitation the buyer has to prove against, it is a plain reading of what the parties' own words already say.

When this changes

The two claims have to be genuinely traceable to the same dollar for a no-duplication clause to bite. A downward completion-accounts adjustment the seller already distributed to its own shareholders before the true-up was finalized is a different problem entirely — it is not double recovery, it is a collection problem against a seller that no longer has the money, and Ontario's Fraudulent Conveyances Act reaches that only where the distribution was made with intent to defeat a creditor, not an ordinary distribution made before any shortfall was foreseeable.

Where this plays out in the Case Files

These questions come up because a specific deal turned on them. Three from this hub:

• • The $180,000 receivable that showed up in two claims — a $180,000 receivable write-down claimed twice — once in the completion accounts, once as a breach — barred by the agreement's own no-duplication sentence.
• • The $140,000 the seller owed back — after paying it out to its own shareholders — the different problem of collecting an adjustment from a seller that already distributed the sale proceeds to its own shareholders before the true-up was finalized.

Sources

• • No statute governs this; the result turns entirely on the purchase agreement's own no-duplication language, construed on ordinary principles of contract interpretation. No reported Canadian decision addressing this specific price-adjustment/indemnity interaction was located.
• • Treadstone Law — purchase price adjustment clauses in an Ontario business sale — the mechanics of the adjustment side of this question.