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1. What does it mean for something to be the “basis of the bargain?” Is the “basis of the bargain” the same as materiality? Something that affects whether the deal would have gone through in the first place? — Neither impose the “but for” requirement (of tort causation). Notice the R2 does not speak of “the basis of the bargain,” as you do, but “a basis of the bargain.” A bargain has multiple bases. The Comment says a basis of a bargain “must have a material effect on the agreed exchange.” In R2 162 something is “material if it would likely induce a reasonable person” to agree to the contract. “Likely to induce” is a much lower standard than “but-for.” Normally “basis of the bargain” is not a problem. The problem is in regards to who bears the risk of the mistake. If we decide that the mistaken party relied on the absence of the mistake, then we are close to saying that the absence of the mistake was a basis of the bargain and if he doesn’t bear the risk of the mistake, then the reliance is justifiable. N.B. – reliance is not part of the language of this defense. I am only using it to explain it.