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When the merchant Antonio agrees to help his friend, Venetian nobleman Bassanio, by lending him money, he must himself take a loan because all his investments are tied up in his three merchant ships which are at sea. Therefore, he is compelled to approach the usurer Shylock, whom he has disparaged for years. Now sensing his advantage over Antonio and an opportunity to avenge himself for his "ancient grudge" against Antonio for his insults and his refusal to charge interest on loans, Shylock agrees to provide Bassanio the money on the condition that if Antonio fails to repay it, Shylock may extract a pound of flesh from the merchant:
...let the forfeit
Be nominated for an equal pound
Of your fair flesh, to be cut off and taken
In what part of your body pleaseth me. (1.3.145-148)
Unfortunately for Antonio, his merchant ships do not return to port before his debt is owed. So, Shylock appeals to the Duke of Venice for the forfeit of Antonio's bond. When the Duke tries to convince Shylock to drop the forfeit and Bassanio offers six thousand ducats for the loan of three thousand, Shylock still refuses. Then, Portia appears dressed as a man; she pretends to be a Doctor of Law and is admitted to the court. However, she, too, fails in her efforts to get Shylock to relent and take the six thousand ducats. But, when Shylock again demands his bond, Portia points out that Shylock cannot spill any blood when he cuts flesh from Antonio:
This bond doth give thee here no jot of blood,
The words expressly are "a pound of flesh:
But in the cutting it, if thou dost shed
One drop of Christian blood, thy lands and goods
Are by the laws of Venice confiscate
Unto the state of Venice. (4.1.306-311)
When Shylock concedes and agrees to let Antonio go, Portia will not permit him, saying that the law requires that he take the flesh. However, if he makes Antonio bleed, Shylock's land and goods will be confiscated, according to law. Unable to cut Antonio without bleeding, Shylock relinquishes his claim. However, Portia will not let him because as an "alien" he has tried to take the life of a Venetian citizen, and the penalty for this crime is that half his property goes to the intended victim, the other half to the state. Defeated, Shylock forfeits half of his possessions to Antonio and is forced to convert to Christianity.
After fooling Bassanio with her disguise and asking for the ring which she has given him for payment, which Bassanio refuses to do, Portia reveals herself. She writes to Antonio that his ships have safely returned to port, and she and Bassanio and friends go to celebrate with Antonio.
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