How to Track a Materiality Scrape After Signing

How to track a materiality scrape is a qualifier-and-damages ledger from signing through indemnity claims, not a one-word “scrape yes” next to the basket. For each signed deal, log whether a scrape exists, whether it is single or double, what it applies to (breach, loss, or both), how it interacts with the basket and the cap, how RWI changes the ask, any carve-outs (fraud, fundamentals), and status of claims that turn on a qualifier. Raziel's indemnity basket tracking page is the threshold. This page is whether “material” in the representation still filters what counts toward that threshold.

This is not legal, tax, insurance, or investment advice. Raziel does not provide it. Copy the indemnification article and the scrape sentence. Do not invent an 87 percent default onto a silent deal.

What this materiality-scrape ledger is (and is not)

A materiality scrape tells the parties to disregard materiality (and often Material Adverse Effect) qualifiers in representations when deciding whether a breach occurred, when measuring losses, or both. Goulston & Storrs, summarizing the ABA Business Law Section’s 2025 Private Target M&A Deal Points Study (139 publicly available agreements executed and/or closed in 2024 or Q1 2025), reports that a materiality scrape was present in 87% of those agreements. Usage rose from 14% in the 2005 publication to 70% in 2015 and peaked at 93% in 2019. The two studies before 2025 showed a slight decrease, then 87% in the current Study. K&L Gates, whose partner chairs the Study, reports that double materiality scrapes increased from 69% in the prior study to 82%, a move the authors link to representations and warranties insurance (RWI). Those are study snapshots. Your purchase agreement controls.

Seven columns on one materiality-scrape row

Open one row per signed deal. Attach the indemnification article, the definition of Material Adverse Effect if the scrape names it, and the RWI binder if any.

• Present or silent. Goulston: 87% of the 2025 Study had a scrape. Copy the sentence (or “silent”). Do not paste 87% onto a deal with no scrape.

• Single or double. Single usually means the scrape applies when measuring losses, not when deciding whether a representation was breached. Double means both. K&L Gates: double scrapes 82% in the 2025 Study (69% in the prior study). Copy which jobs the sentence actually names. Do not treat “scrape” as double unless both jobs are written.

• What is disregarded. Materiality, Material Adverse Effect, “material to the Business,” knowledge overlays, or a named subset. Copy the defined terms. A scrape that ignores “material” but leaves MAE in place is a different row than one that names both.

• Basket interaction. Whether the scrape applies when testing the deductible or tipping basket, or only after the basket is hit. Raziel's basket page is the threshold dollars. This cell is whether qualified breaches still count as $1 or as $0 until they are “material.”

• Cap and specials. Whether the scrape applies to general representations only, or also to fundamentals and special indemnities. Keep the cap on its own row. The scrape changes what flows into the cap. It is not the cap.

• RWI overlay. K&L Gates ties the jump in double scrapes to RWI. Underwriters often want a double scrape so policy coverage is not undercut by a “material” qualifier the buyer already accepted. Copy whether the binder or the RWI covenant requires a scrape, and whether the policy is sole recourse. Do not assume every RWI deal has a double scrape.

• Status. Copied, claim noticed that turns on a qualifier, claim paid with scrape applied, or closed. When a claim is paid, book the cash date on the deal ledger.

Copy the sentence, not the 87 percent print

Do not paste 87% onto a silent agreement. Do not paste 82% double onto a single scrape. Do not fold the scrape into the basket row or the indemnity-cap row. The basket is the threshold. The cap is the ceiling. The scrape is the filter that decides which qualified breaches count as losses. Keep the three cells separate so a claim notice is classified against the right math.

When the ledger holds

The row holds if the seven cells are copied from the PDFs (or marked missing). It fails when you invent a double scrape, ignore the basket interaction, or treat RWI as if it rewrote the paper. Raziel's alternative asset dashboard is where deal documents and cash events should sit together. Raziel does not interpret your scrape. Copy the seven columns.