--- a/spec/latest/json-ld-api/index.html	Thu Aug 30 17:21:37 2012 +0200
+++ b/spec/latest/json-ld-api/index.html	Tue Sep 04 12:07:12 2012 -0700
@@ -1208,8 +1208,9 @@
         <li id="process-context">If <em>context</em> equals <tref>null</tref>, clear the <tref>active context</tref>.</li>
         <li>If <em>context</em> is an <tref>array</tref>, process each element as <em>context</em> in order
           by starting at <a href="#process-context">Step 2.1</a>.</li>
-        <li>If <em>context</em> is a <tref>string</tref>, it MUST have a lexical form of <tref>absolute IRI</tref>.
+        <li>If <em>context</em> is a <tref>string</tref>, it MUST have a lexical form of <tref>IRI</tref>.
           <ol class="algorithm">
+            <li>Expand <em>context</em> according to <a href="#iri-expansion">IRI Expansion</a>.</li>
             <li>Dereference <em>context</em>.</li>
             <li>If the resulting document is a JSON document, extract the top-level <code>@context</code>
               element using the JSON Pointer "/@context" as described in [[!JSON-POINTER]]. Set <em>context</em>