Warning: Spoilers ahead!
Here's what happened on Tuesday's episode of New Girl (Season 2, Episode 17: "Parking Lot"):
When a new parking spot opens up in their building, the loft mates argue over who deserves it the most. Winston, who's busy trying to keep a 'sex date' with Daisy, drops out of the running early on, leaving Nick, Jess, and Schmidt to duke it out. Eventually, Nick wins, but then donates the spot to Jess when she tries to seduce him (hilariously) by wearing his hoodie and chewing it provocatively.
Meanwhile, Winston gets to Daisy's apartment and realizes he forgot to bring a condom. She doesn't have much time, so he runs to the nearest convenience store to buy one, only to discover that he actually pulled on Daisy's sweatpants and doesn't have any money. He spends the rest of the episode asking anyone he meets if they have a condom, including CeCe's new boyfriend...while they're on a date.
Back at the apartment, Schmidt finally finds out about that Nick and Jess kissed, and freaks out, accusing Nick of breaking the 'no nail' clause in their roommate contract. Nick feels bad and offers Schmidt the parking spot to make peace. But Schmidt is too hysterical to listen to reason, and the three of them end up racing to their cars to claim the spot first. It gets pretty intense--Nick claims the spot with a deck chair, Schmidt bumps Nick with his car, and then Jess drives into Schmidt's car. They eventually decide that whoever can sit longest within the borders of the parking spot will win.
While they're staking out the spot, Nick and Jess finally have an open conversation about how the kiss has affected their relationship.
Nick and Jess are still struggling to return to normal after their unexpected kiss. The episode opens with them brushing their teeth together, trying to convince each other that things are completely normal between them. "I thought we could go back to the way things were, but we can't," Jess says. Nick apologizes for the kiss, and says, "that kiss was the dumbest mistake I have ever made." But in classic Nick style, he takes it way too far, and tells Jess how much he regrets the kiss, and that if he could take it back, he definitely would. Jess gets upset and leaves, surrendering the parking spot.
Back upstairs, Nick apologizes and says, "I don't regret kissing you. I regret what it did. It made things weird." Schmidt shows up and says the only way to fix the situation is for Jess to kiss another roommate, as per their roommate contract. He and Jess eventually kiss, and it's as awkward as you might imagine it would be.
As for Winston? It's too late for him and Daisy, but he gets the parking space as a consolation prize--only to discover that his car is too small for the spot.
New Girl airs Tuesdays on at 9/8c on Fox.