At Angelo's house, Escalus and Angelo read a letter from the Duke and note that Vincentio's letters don't seem to make any sense. Has he gone mad, they wonder.
Angelo also wonders why the Duke wants them to meet him at the city's gate and why the Duke wants them to make an announcement that anyone who's got a beef with Angelo's version of justice should make a public declaration.
Escalus reasons, incorrectly, that the Duke just wants to make things easier for them.
Escalus says so long to Angelo and heads home for the night.
Alone on stage, Angelo tells us that he knows he's in deep, deep trouble. He hopes that Isabella will be too ashamed to accuse him of taking her virginity. (OK. Now we know that Angelo and Mariana have had their secret rendezvous in the garden, where Angelo thought he was hooking up with Isabella.)
Angelo also confesses that he didn't hold up his end of the bargain (by freeing Claudio) because he was afraid Claudio would want revenge.