Anonymised, illustrative composite. Eleven separate breaches, discovered over the buyer's first year of ownership, totalled $28,500 — comfortably above the $15,000 aggregate basket. The buyer still recovered nothing.
At a glance
A Saskatchewan agricultural-equipment dealership was sold on a share basis for $3,100,000. The purchase agreement's indemnity clause was more heavily layered than the market default: beneath the standard aggregate basket of $15,000, it added a second, prior filter — a $2,500 per-claim de minimis, providing that no individual Loss below that amount would count toward the basket at all, however many such Losses eventually accumulated. A further sentence addressed what counted as one claim rather than several: Losses “arising from the same underlying facts, event, or circumstance” would be treated and aggregated as a single claim for purposes of the per-claim threshold, rather than assessed item by item.
Over its first year of ownership, the buyer's controller identified eleven distinct issues that, taken together, looked like a straightforward breach of the seller's general representations: three unregistered or improperly discharged liens against inventory the seller had represented as unencumbered ($1,200, $2,100 and $900), a misclassified warranty-reserve balance ($4,100), understated accrued vacation pay ($3,600), a customer discount program priced below the disclosed schedule ($3,800), and five smaller bookkeeping discrepancies ranging from $650 to $2,300. Individually, several items exceeded $2,500; most did not. In aggregate, the eleven totalled $28,500 — nearly double the $15,000 basket.
The buyer's position was that all eleven traced to the same underlying cause: a general, sloppy standard of bookkeeping and registry maintenance in the target's finance function in the year before sale, which should count as one “circumstance” under the anti-stacking language, aggregating the full $28,500 into a single claim that cleared both the per-claim floor and the basket easily. The seller's position was that the anti-stacking clause aggregates items arising from one factual event, not items that merely share a common cause of carelessness — and that a lien registration failure, a warranty reserve error, an accrual understatement and a pricing error are different facts, different events, and different circumstances, however much they share a common root in poor bookkeeping.
No statute governs how a Canadian indemnity clause defines or applies a per-claim de minimis, an aggregate basket, or an anti-stacking clause between them; all three are negotiated numerical filters, layered by contract, and their interaction is decided entirely by the words chosen. Treadstone Law's guidance on baskets and deductibles describes exactly this two-stage structure as a common, deliberate design: “Purchase agreements typically include a de minimis threshold below which individual losses do not even count toward the basket at all — the goal being to filter out genuinely trivial issues before they ever reach the indemnity mechanism. Above that per-item threshold, qualifying losses accumulate toward the basket amount itself, which acts as an aggregate floor across the whole indemnity period.” The same guidance is explicit that there is no standard figure for either number: “there is no fixed or standard amount under Ontario law.”
The critical point the buyer's aggregate-total argument missed is that the per-claim de minimis is a gate an individual Loss has to clear before it can even be counted toward the basket at all — a different mechanic from the basket itself, which this hub's companion file, a basket that swallowed every claim the buyer had, works through on its own: there, a single aggregate threshold applied to a set of claims that had already cleared it as individual items. Here, most of the eleven claims never got that far, because they failed a filter that operates before the basket is even reached. A buyer can clear the basket on a straightforward addition of every dollar of loss and still recover nothing, if enough of those dollars are individually too small to be counted at all.
Whether the anti-stacking clause rescued any of the excluded items turned entirely on how narrowly “the same underlying facts, event, or circumstance” was read. A shared root cause — general carelessness in the finance function — is not, on its own, one circumstance; it is a description of why several different circumstances occurred. But three items that shared not just a cause but the identical mechanism — a single failure to maintain the target's Personal Property Security Act registrations against equipment inventory, which produced all three unregistered or improperly discharged liens — were one circumstance in a narrower and more defensible sense: one registry failure, three consequences of it.
The parties' agreed accountant, engaged to resolve the dispute under the agreement's expert-determination clause, read the anti-stacking language narrowly. Eight of the eleven items — the warranty-reserve error, the vacation-pay understatement, the pricing-program shortfall, and the five smaller bookkeeping discrepancies — were held to be genuinely distinct facts, events and circumstances, each assessed on its own against the $2,500 per-claim floor; all eight failed it and were excluded entirely. The three lien-related items, all traced to the single PPSA registry failure, were aggregated into one claim of $4,200, which cleared the per-claim floor — but on its own, $4,200 fell well short of the $15,000 aggregate basket, and with no other claim left standing to combine it with, it too recovered nothing.
With only a single aggregate basket and no per-claim floor, the full $28,500 would have cleared the $15,000 threshold easily. The per-claim filter, accepted at signing as a routine protection against nuisance claims, did exactly what it was built to do: keep small, unrelated issues out of the indemnity mechanism entirely, at the cost of a buyer who had a real, documented $28,500 of loss and no route to any of it.
The tell is in the clause's own structure, readable before signing: does the indemnity apply a single aggregate basket, or does it add a separate, prior per-claim floor that a Loss must clear before it can even be counted? And if it adds the second filter, how narrowly or broadly is the anti-stacking language drafted to define what counts as “the same” circumstance? A buyer negotiating a deal in a sector prone to many small, low-dollar compliance issues — rather than one large one — should treat the per-claim floor as at least as important as the basket itself.
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