Lucetta invites Farfrae, who has come looking for Elizabeth-Jane, to sit down. The two talk and watch the bustling marketplace from Lucetta’s window. They witness a farmer negotiating the employment of an old shepherd. The farmer refuses to take the old man if his son is not part of the bargain, but the young man is hesitant to go, for it means leaving behind the girl he loves. Touched by this scene, Farfrae goes out and hires the young man so that he can remain close to his love. Minutes after Farfrae leaves, Henchard arrives, but Lucetta has her maid tell Henchard that she has a headache and does not wish to see him that day.
Elizabeth-Jane enjoys living with Lucetta, and the days pass pleasantly for both. One day, they look out their window at the market and see the demonstration of a “new-fashioned agricultural implement.” When they go out to take a closer look at it, they meet Henchard, who ridicules the machine. Elizabeth-Jane introduces him to Lucetta, but as he turns to leave she thinks she hears him accuse Lucetta of refusing to see him. Elizabeth-Jane’s suspicions are aroused, but she decides that she must have heard Henchard incorrectly.
Farfrae appears and praises the usefulness of the new machine. Elizabeth-Jane wonders about Henchard’s familiarity with Lucetta but soon learns that they have met previously and that Lucetta is interested in Farfrae. One day, Lucetta tells Elizabeth-Jane a story. Claiming to seek advice for a “friend,” she relates her present situation with Henchard and Farfrae. Elizabeth-Jane is not fooled by the claim that the story is about a friend and tells Lucetta that she cannot give an opinion on such a difficult subject.
Farfrae continues to call on Lucetta with increasing frequency. One day, while Elizabeth-Jane is out, Henchard calls on Lucetta and tells her that he is ready for them to be married. He claims that he is doing her a favor by making “an honest proposal for silencing [her] Jersey enemies,” but Lucetta resists. She refuses to be a slave to the past and defiantly claims, “I’ll love where I choose!”
Henchard and Farfrae meet one day while walking, and Henchard asks the younger man if he recalls the story of the woman from Jersey whom he gave up in order to remarry his first wife. He tells Farfrae that the Jersey woman now refuses to marry him, and Farfrae states that Henchard has no further obligation to her. Later, Henchard visits Lucetta and asks if she knows Farfrae. She says that she does, but she downplays the significance of her reply by claiming to know almost everyone in Casterbridge. Just then, someone knocks at the door, and Farfrae enters. Henchard thus begins to suspect that Farfrae is his rival for Lucetta’s affections.
Henchard decides to hire Joshua Jopp, the man whose managerial position he had earlier given to Farfrae. He tells Jopp that his primary objective is to cut Farfrae out of the corn and hay business. In order to discern harvest conditions, Henchard consults a man known as a “forecaster” or weather prophet. This man predicts that the harvest will bring rain, so Henchard, trusting that the upcoming crop will be bad, buys a large quantity of corn. When harvest comes, however, the weather is fair and the crop is good, which causes prices to fall. Henchard loses money and fires Joshua Jopp.