Johannes launches a lengthy discussion of the story of Agnes and the merman. In his version, the merman seduces Agnes and is about to bring her back with him into the sea, but sees humility and faith in her eyes. Unable to violate this innocence, he returns her to her home instead.

As in the other examples, the merman has the choice between hiddenness and disclosure. Hiddenness consists in repentance, but this repentance leaves both himself and Agnes unhappy. Agnes genuinely loves him, so she will be unhappy at being deprived of him. He will be unhappy because he also loves Agnes, and because he will be burdened with the new guilt of making her unhappy.

Johannes suggests that he might surrender to the demonic element in repentance and try to save Agnes by deceiving her and making her no longer love him. In surrendering to the demonic, the merman becomes the single individual who, as a single individual, is higher than the universal.

There are two possibilities according to which the merman could be rescued from the demonic in repentance. On one hand, he can remain hidden and have faith that the divine will save Agnes. On the other hand, he can allow himself to be saved by Agnes and marry Agnes. This movement involves a paradox somewhat similar to Abraham's. The merman's guilt has brought him to make the movement of repentance, which brings him higher the universal. To return to the universal, then, he must make a further movement, by virtue of the absurd, since he cannot return to the universal by his own power.

Johannes next turns to the book of Tobit, which tells of Tobias who wants to marry Sarah, whose seven previous husbands have been killed on the wedding night by the demon that loves her. Johannes suggests that the real hero of the story is not Tobias, for having the courage to marry a woman with such a past, but Sarah, for allowing herself to be healed of this past. She is willing to accept the responsibility for Tobias' fate, and she has faith that, if Tobias survives, she won't grow to resent or hate him for being so deeply in his debt. A woman in her position has to endure a great deal of sympathy, and sympathy is a kind of humiliation.

Sarah is naturally outside the universal by virtue of being in unique circumstances, and so is naturally in the paradox: she can choose either the demonic or the divine. The demonic expresses itself as contempt for others and hatred of sympathy (as we find in Shakespeare's Richard III. The divine expresses itself in Sarah's faith.