Perdue's Short Sword is a side quest that may be obtained by speaking very carefully to Perdue in the barroom of the Red Sheaf Inn in Beregost. In "classic" Baldur's Gate this quest is commonly referred to as Retrieving Perdue's Sword. After being mugged by Gnolls in High Hedge, Perdue has taken refuge in the Red Sheaf Inn. Speak to him and he'll ask you to retrieve it. He's difficult to talk to; say the wrong thing and you'll lose the quest. The correct series of responses is; 1, 2, 1, 1.