Baxter's Neighbors Think He is a Playboy (Dramatic Irony)
The central and first irony we encounter in the film is the fact that everyone in Baxter's life thinks that he is carrying on affairs in his home and partying all the time. Having loaned his apartment out to other business executives, Baxter has made his home a kind of brothel, and his clients make a lot of noise. The dramatic irony lies in the fact that while the viewer knows that Baxter is not having any affairs or partying in his own apartment—in fact, he is a pretty low-key, quiet man, himself—his neighbors think that he is the cause of all the noise. Dr. Dreyfuss urges him, "A nebbish like you!...You know, Baxter, I'm doing some research at the Columbia Medical Center and I wonder if you could do us a favor?...When you make out your will—and the way you're going, you should—would you mind leaving your body to the University?...Slow down, kid." In fact, we know that Baxter need hardly "slow down," but he doesn't want to reveal to his neighbor that he is loaning out his apartment, so he stays silent and Dreyfuss stays unwitting.
Baxter Doesn't Know that Fran is Sheldrake's Mistress (Dramatic Irony)
Before Baxter realizes that the compact mirror that he found in his apartment belongs to Fran, he has no idea that Fran is the woman that Sheldrake is having an affair with in his apartment. Before this, Fran is his work crush, a charming woman that he himself wants to have a relationship with. But the viewer knows that, in wanting to date Fran, Baxter is barking up a more complicated tree than he realizes. Thus, there is a disconnect between how much he knows about his beloved Fran, and how much we know, which creates dramatic irony. As Baxter waits for Fran outside The Music Man, we know that Fran is spending the evening with Sheldrake, while he thinks she is simply standing him up.
Kirkeby thinks Baxter slept with Fran (Dramatic Irony)
When he arrives at Baxter's apartment on Christmas morning, executive Kirkeby happens to notice Fran passed out in Baxter's bed. He mistakes her recuperation from a suicide attempt as a post-coital scene, and congratulates Baxter on having bedded one of the most desirable women in the office. This creates dramatic irony, in that we know that Baxter has not slept with Fran, even though Kirkeby assumes they have. Not wanting to out Fran or Sheldrake, Baxter goes along with Kirkeby's assumption, which has consequences when Fran's brother-in-law comes to the office in search of her. Kirkeby tells her brother-in-law, Karl, that Fran is sleeping with Baxter, and Karl angrily goes in search of her. Even though we know that Baxter has done nothing wrong, he is blamed for all of Sheldrake's indiscretions, which creates dramatic irony and narrative tension.
Champagne Cork Pop (Situational Irony)
When Fran leaves Sheldrake once and for all and runs to Baxter, she is excited to show up at his apartment. On the stairs up to his apartment, however, she hears a loud bang. Having confided to each other about their respective experiences with attempted suicide, Fran knows that Baxter once tried to shoot himself. Thus, she mistakes the bang for a gunshot, and believes that Baxter has shot himself just as she's arriving to save him from a solitary life. When he opens the door, he is holding a fizzing bottle of champagne and it is clear that the bang was simply the popping of the cork. What Fran (and the viewer) thought was a moment of self-harm and suicide was in fact a harmless celebratory moment, an ironic turn of events.
