A materiality qualifier is wording in a warranty that limits the seller’s exposure to matters that are material, often defined either as “material to the business taken as a whole” or by reference to a specified dollar threshold. Materiality qualifiers function as a soft cap below the formal indemnity basket, ensuring small or trivial breaches do not give rise to liability.
The drafting interaction between materiality qualifiers and the basket is important: if a warranty is already qualified by materiality, applying the basket on top can amount to double protection for the seller. Buyers often resist materiality qualifiers in warranties they consider fundamental.