Tom is home in time to share in the family’s Christmas celebration. However, the holidays are not as happy as they might have been. Mr. Tulliver is constantly in a bad mood because a neighbor wants to divert some of the water that the mill needs to properly function. The neighbor, Mr. Pivart, is new to the community and lives upriver of the Tulliver mill. Pivart wants to use the river, through a system of dams, to irrigate his fields. The Tulliver family has lived on the river and has run the mill for more than one hundred years, so Mr. Tulliver feels he has the right to claim the river for his purposes. However, Tulliver knows that a lawyer by the name of Wakem is planning to represent Pivart. Tulliver is very familiar with Wakem and does not like the man.

Mrs. Tulliver pleads with her husband not to “go to law” over this case. He has lost a lot of money in going to court over past issues. Although Mr. Tulliver may be right, Mrs. Tulliver concludes, those who are right do not always win. Mr. Tulliver’s sister, Mrs. Moss, is visiting with Mrs. Tulliver as the discussion of the possible lawsuit is put forth. Mrs. Tulliver mentions how her sisters are always reprimanding her for letting her husband do whatever he wants. Mrs. Moss commends her brother for having a strong mind, which she hints may not be the case with Mrs. Tulliver’s sisters’ husbands.

Even if Mr. Tulliver had wanted to honor his wife’s request not to turn to the law in this particular case, he cannot stand by after hearing that Wakem is the lawyer who will represent his opponent. As a matter of fact, Tulliver believes that the only reason Pivart is pursuing the case is that Wakem has agitated him. In the past, Wakem has brought similar suits against Tulliver. One of them involved the use of a common road. The other addressed the right of a particular bridge that annexes some of Tulliver’s land. Tulliver believes that all lawyers are “rascals,” and Wakem is one of the worst kind. Mr. Tulliver’s lawyer, Mr. Gore, is obviously not as talented as Mr. Wakem is. However, Tulliver knows he has an advantage: the arbitrator, Counsellor Wylde, is on his side. This gives Tulliver extra confidence in this case.

When Tom learns of his father’s dislike of Mr. Wakem, he tells his father that Wakem’s son is to be sent to King’s Lorton to be taught by Rev. Stelling for the next term. Tom suggests that his father surely does not want him to be in the presence of Mr. Wakem’s son; he hopes his father might not make Tom return to classes. However, Mr. Tulliver is secretly proud of the fact that his son and Wakem’s son will be attending the same school. Tulliver tells Tom that he has seen the boy, who suffers from a deformity and looks more like his mother than his father. He senses that contact with this boy will do Tom some good.