Aziz arrives at Fielding's house for tea. They have not met before but quickly discover that they get along well. Fielding breaks his last collar stud, and Aziz, out of Fielding's sight, takes the back stud from his own collar and offers it to Fielding, pretending that it is a spare one. (The significance of this will become apparent later.) Aziz is disappointed to hear that Mrs. Moore and Miss Quested are also coming to tea, since he would prefer to keep his new friend Fielding to himself. But when the ladies arrive, Aziz finds them easy to talk to. He even invites them to visit him, but then is horrified at his own suggestion, since his bungalow is not an attractive house.
Professor Godbole, the learned Hindu Brahmin, arrives. He eats much and says little. Aziz chatters on. Adela confesses that she does not plan to settle in India. Fielding guides the conversation and ensures that it stays on light topics. After Fielding and Mrs. Moore leave for a tour of the college, Aziz corrects his mistake in inviting the ladies to his house; he suggests instead a trip to the Marabar Caves, even though he has never been there himself. Godbole starts to explain what the caves are, but he holds back and gives no details of why they are famous, despite Aziz's efforts to draw him out.
Ronny arrives. He wants to take Adela and Mrs. Moore to watch a polo match. He is annoyed that Fielding is absent and has left Adela alone with two Indians. Fielding tries to mollify him. As the tea party breaks up, everyone is annoyed or upset by one thing or another. Professor Godbole sings a religious song about Krishna, one of the most revered of the Hindu incarnations of God.
On their way to the club, Ronny criticizes Aziz for forgetting his back collar stud. He thinks this shows how Indians lack attention to detail. Ronny does not approve of the proposed picnic at the Marabar Caves. Ronny and Adela do not get along, and Adela decides she will not marry Ronny. After the polo match, she informs Ronny of her decision. Ronny is disappointed but he accepts her decision. They agree to remain friends. The Nawab Bahadur arrives and interrupts their conversation. The three of them go for a ride in the Nawab's chauffeur-driven car, and meet with a slight accident when they hit an animal ( a hyena, they decide) on the road. No one is hurt. A car approaches from the opposite direction, driven by Miss Derek, a young Englishwoman. Miss Derek drives them home, except for the chauffeur, who is left to repair the damaged vehicle. Ronny and Adela regain their warm feelings for each other, and after they get home they agree to become engaged. They inform Mrs. Moore of their decision, but she is tired from her visit to the college, and does not greet the news with much enthusiasm. She is thinking more of her own return to England. As they continue to talk, Ronny gives expression to his negative view of all Indians. They cannot be relied upon, and that is why he believes the British are necessary for India. They then amuse themselves with a game of Patience. Meanwhile, the Nawab Bahadur blames himself for the car accident. He believes that what they hit was not a hyena at all, but the ghost of a drunken man who the Nawab had run over and killed nine years previously.
Having established in the early chapters that East and West see things through very different eyes and fail to understand each other, Forster provides an example of how such misperceptions, once established, lead to misinterpretations of many details of day-to-day life. This is the incident that begins when Fielding breaks his collar stud. Aziz, wanting to assist his new friend in any way he can, offers him his own, from the back of his collar. But unknown to him, this generous gesture backfires on him, because later Ronny notices that the back of Aziz's collar is too high on his neck. He thinks he forgot to put the collar stud in. This merely confirms for him that Indians do not pay attention to detail and are slack. Thus an act of generosity on Aziz's part gets misinterpreted and merely feeds into the racial stereotype that Ronny has got stuck in his mind. It is a perfect illustration of how the English will never really understand Indians.
But there is also misunderstanding on the part of Aziz. He is too easily offended, too quick to perceive a slight when none was intended. When Aziz mentions Post-Impressionism, Fielding's innocuous reply gives him the false impression that Fielding was slighting him by implying that an Indian had no right to know anything about such things. This shows that because he is a member of a subject race, with its regular humiliations, Aziz too often reacts in ways that are inappropriate.
In these ways, East and West continue to misunderstand each other, and make true communication between them almost impossible.