As they are watching TV in Jerry's apartment, Jerry and Elaine flip through the channels, stumbling upon a softcore pornography channel. Upon the realization that neither of them has had sexual relations in a while, they start toying with the idea of sleeping together while, at the same time, preserving their normal close friendship. However, as they do not wish to ruin that friendship they establish a set of ground rules. The first rule is "no calls the next day". The second is "spending the night is optional". Happy with their agreement, referred to within the conversation as "this" (the friendship) and "that" (the sexual intimacy), they make their way to the bedroom. The next day Jerry has lunch with his friend George Costanza (Jason Alexander), and tells him of his situation with Elaine. George remains skeptical, even after Jerry explains the rules system to him. Jerry and Elaine get into an argument over the second rule. Jerry eventually does not spend the night at Elaine's apartment, leaving their agreement on shaky terms. With Elaine's birthday coming up, Jerry has to decide on what to get her. Since they are friends but they are still having sex, he feels that the symbolism of the gift needs to be carefully thought out. He looks for a gift with George but is unable to think of anything, though he remembers her saying "something about a bench". Elaine is unhappy with the eventual gift ($182 cash) and outright insulted by the platonic gift card. When Jerry's neighbor Kramer (Michael Richards) gives Elaine the bench she was looking for, for which she is very grateful, she and Jerry talk over their agreement. Jerry proposes that they go back to simply being friends, but Elaine is so upset by the birthday debacle that she feels unable to go on with either a friendly or sexual relationship with Jerry, stating that what she wanted all along was "this ... that ... and the other." While eating at the coffee shop the next day, Jerry tells George that the future of any sustained contact with Elaine, either relationship or friendship, is in serious jeopardy. Together they imagine the possibility of a chance meeting with Elaine, then married to someone else, five years in the future; they then humorously declare they'd have to kill the hypothetical husband, only to weigh the terrifying penal repercussions of committing such a crime. At that point, Jerry acknowledges that his next phone call with Elaine will be a make-it-or-break-it conversation. When Kramer sees them again, however, Jerry and Elaine have made up and are a couple.