Most good stories start with a fundamental list of ingredients: the initial situation, conflict, complication, climax, suspense, denouement, and conclusion. Great writers sometimes shake up the recipe and add some spice.
Initial Situation
A knight in King Arthur's court rapes a young woman. As punishment, the queen sends him on a quest to discover what women most desire.
The beginning of "The Wife of Bath's Tale" sets the action in a time and place that would have been familiar to most medieval readers, and would have given them certain expectations for the behavior of its characters. Then, with the knight's rape of a young woman, it defies those expectations. The knight's action upsets the equilibrium of the court; that's how we know we have a situation on our hands.
Conflict
Unable to discover what women most desire, the knight meets a loathly lady who offers to tell him the answer if he promises to fulfill her next request of him.
The knight definitely has a conflict on his hands here: on the one hand, he desperately needs to know what women most desire. On the other hand, he has no idea what the lady's request will be. His back against a wall, he has no choice but to agree to the lady's proposal, but this puts him in implicit conflict with her, as by pledging an open-ended troth to her, he in effect yields control over his person and will to her at some point in the foreseeable future.
Complication
The loathly lady requests that the knight marry her.
We thought the knight's case would be open and shut: either he figures out what women most desire and saves his neck, or doesn't and loses it. Instead, the loathly lady shakes things up by requesting that the knight marry her. Things are definitely getting complicated.
Climax
The loathly lady offers the knight two choices: he can either have her old and ugly but faithful, or young and beautiful but with no guarantee of her fidelity.
Since most of "The Wife of Bath's Tale" has been concerned with educating the knight about women, this point, at which he has to use that knowledge to choose the correct answer, is its climax. The choice the loathly lady offers him, moreover, will determine the outcome of the rest of his life. It doesn't get much more climactic than that.
Suspense
The knight answers his wife by leaving the decision up to her, in effect yielding 'maistrye.'
This being a fairy-tale, we suspect that the 'choice' the loathly lady offers the knight is some kind of test. So the whole time he's answering, we're wondering: Is he going to ace it? Or, in keeping with his past actions, will he fail miserably? The suspense is killing us.
Denouement
Pleased with the knight's answer, the loathly lady promises to be both young and beautiful and faithful.
Whew, he passed the test! Or at least, he must have, judging by the loathly lady's reaction; she definitely seems to be rewarding the knight. We also learn that the point of the choices she offered him was really to determine whether or not the knight was willing to yield 'maistrye' to her.
Conclusion
They live happily ever after.
OK, so the story doesn't actually say that, but this ending is as close to happily ever after as it gets; the knight and his wife live in perfect harmony for the rest of their lives, the young, beautiful maiden obeying her husband in everything.