Sarcasm: Junk is something you've kept for years and throw away three weeks before you need it. - Anonymous - Sarcastic Quotes
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Situational Irony

Situational irony results from recognizing the oddness or unfairness of a given situation, be it positive or negative. Even though a person typically cannot justifiably explain this unfairness logically, the coincidental nature of the situation is still very obvious to those evaluating it. For example, if the president of Microsoft, Bill Gates, were to win a contest whose grand prize was a computer system, the irony would be situational because such a circumstance would appear ridiculous or "funny" for a number of reasons. Bill Gates doesn't need a computer, he runs the world's largest software company, and he's filthy rich, so winning a computer seems silly and "ironic". This list of half-justified reasons for the oddness of the situation could go on and on but on a very basic level of reasoning all these reasons does really adds up. All can be logically rebutted. Bill Gates has just as much chance of winning a contest like that as anyone else who entered. A computer is a great prize to wins, etc etc. The true "oddness" cannot be explained logically, even though everyone would find that particular situation weird, funny, and "ironic". This sense of being "unfair" or "unfortunate" is a trademark of situational irony. The unusual nature of the circumstances are obvious to everyone and yet, they are not wholly clear when you try to explicate them. Typically the justification for situational irony boils down to someone declaring, "Well, it just is!"

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No, That's Not Ironic!

Once in a while (actually, it happens quite often) one runs across a coworker, acquaintance, or total stranger who uses words without knowing what they actually mean. For example, one time I had a supervisor who laughed at a coworker who was not familiar with the frescos of the Sistine Chapel. In breaking the news to this coworker, he said, "How can you not know what the Sixteenth Chapel is?". At first I couldn't believe my ears, but I composed myself, and tried to confirm what my ears had heard. So I asked him to repeat the name of the fresco. This time he deliberately pronounced each syllable slowly so that I could really learn; "It's the Sixteenth Chapel", he said.

Now what does the above story have to do with irony, you ask? Well, read the How to Recognize Irony tutorial to understand.