The setting of "The Garden Party" begins at Laura's home and shifts to the neighborhood and home of the dead man's widow. When the story opens in medias res (or res in medias), Laura is making preparations for a garden party and greeting workmen who have come to carry out the details of the arrangements. The house and garden are the elegant living places of the wealthy Sheridan family and connected to an accidental killing of a young carter who left a young widow behind him. It is this accidentally event that forms the main conflict of the story because Laura feels the moral impropriety of holding a party in the garden after a man lost his life. There is an implied shift of scene as the party seems to carry on without narratorial comment aside from scattered stream of consciousness remarks made by Laura that indicates the fulfillment of the party.
Later, the setting changes to the neighborhood and home of the young widow when Laura's mother insists that she remain in her party clothes and go to deliver a platter full of party leftovers to the home of the grieving young widow. Laura capitulates and goes on the journey down the lane to make the delivery while still in her garden party dress and black hat. The lane leads Laura to the cottage of the young man and his widow, which is surrounded by a mournful group of people through whom Laura makes her way. Inside the cottage, the setting reveals grieved characters and the body of the young man laid out looking peaceful and restful in death. While looking at the young man, Laura has a flash of enlightenment, an epiphany, and realizes how incongruous her presence is there amidst the trappings of luxury, arrogant life, and garden parties. She exclaims, "Forgive my hat," the symbol of all the incongruities, and leaves the cottage setting to reenter the lane where her brother meets her, having come after her to give her encouragement. They share the knowledge that life is an incongruence of having and not having as her brother says, "Isn't it, darling?"