--- a/spec/latest/json-ld-api/index.html	Fri Mar 30 13:51:32 2012 +0800
+++ b/spec/latest/json-ld-api/index.html	Fri Mar 30 14:10:23 2012 +0800
@@ -1042,15 +1042,14 @@
   <h2>IRI Compaction</h2>
   <p>Some keys and values are expressed using <tref>IRI</tref>s. This section defines an
     algorithm for transforming an IRI to a <tref>term</tref> or <tref>compact IRI</tref> using the
-    <tref>term</tref>s specified in the <tref>local context</tref>.</p>
+    <tref>term</tref>s specified in the <tref>active context</tref>.</p>
 
   <p>The algorithm for generating a <tref>compact IRI</tref> is:
     <ol class="algorithm">
-      <li>Search every key-value pair in the <tref>active context</tref> for
-        a <tref>term</tref> that is a complete match
-        against the IRI. If a complete match is found, the resulting compacted
-        IRI is the <tref>term</tref> associated with the IRI in the
-        <tref>active context</tref>.</li>
+      <li>Search every key-value pair in the <tref>active context</tref> for a <tref>term</tref> that is a complete match
+        against the IRI. For all matches that are found, the resulting compacted IRI is the <tref>term</tref> associated with
+        the IRI in the <tref>active context</tref>. If there is more than one <tref>term</tref> produced, the final value is the
+        shortest and lexicographically least value of the entire set of matching <tref>term</tref>s.</li>
       <li>If a complete match is not found, search for a partial match from
         the beginning of the IRI. For all matches that are found, the resulting
         <tref>compact IRI</tref> is the <tref>term</tref> associated with the partially matched