What is a materiality scrape, and what's the difference between a single scrape and a double scrape?

The rule

No statute defines what a materiality scrape does, or how far it reaches — it is a pure drafting construct, and its scope is decided entirely by what the clause actually says it disregards. A representation qualified “in all material respects” is breached only by an inaccuracy that clears that materiality threshold in the first place. A single scrape, typically worded for purposes of calculating the amount of any Losses arising from a breach, presupposes a breach that has already arisen; it instructs how to measure it, and says nothing about whether it exists.

A double scrape goes further, disregarding materiality both in determining whether a breach occurred and in calculating what it is worth — so a trivial, technically immaterial inaccuracy still counts as a breach entitling the buyer to dollar-for-dollar recovery. On identical facts, a single scrape and a double scrape can produce opposite outcomes: a small misstatement that does not clear the representation's own materiality bar is simply not a breach under a single scrape, however the resulting Losses would later be calculated.

When this changes

The entire distinction lives in a few words. For purposes of calculating is single-scrape language. In determining whether a breach has occurred and in calculating the amount of any Losses arising from it is a double scrape. Buyers negotiate for double; sellers resist it precisely because it turns every technical, commercially trivial inaccuracy into a compensable breach.

Where this plays out in the Case Files

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

• • The scrape removed materiality from damages, not from the breach test — a $12,000 inventory misstatement that was not a breach at all under the agreement's single scrape, because it never cleared the representation's own materiality threshold.
• • An understated EBITDA line was worth seven times more than it recovered — the next question once a breach is established — how the Losses definition itself limits what the buyer can recover for it.

Sources

• • No statute defines a materiality scrape or its scope in a Canadian share purchase agreement; it is a pure drafting construct, and its effect depends entirely on whether the clause reaches the breach determination or only the damages calculation.
• • Treadstone Law — the materiality qualifier in an Ontario business sale agreement — the underlying qualifier a scrape clause selectively removes.