Through a fault in manufacturing, a robot, RB-34 (also known as Herbie), is created that possesses telepathic abilities. While the roboticists at U.S. Robots and Mechanical Men investigate how this occurred, the robot tells them what other people are thinking. But the First Law still applies to this robot, and so it deliberately lies when necessary to avoid hurting their feelings and to make people happy, especially in terms of romance.
However, by lying, it is hurting them anyway. When it is confronted with this fact by Susan Calvin (to whom it falsely claimed her coworker was infatuated with her – a particularly painful lie), the robot experiences an insoluble logical conflict and becomes catatonic.
HAL 9000, who confronted a similar paradox when told to keep a secret, while being "hardwired" to return information truthfully and without concealment.