diff --git a/index.html b/index.html
index 49cde345..66557007 100644
--- a/index.html
+++ b/index.html
@@ -3293,6 +3293,11 @@ <h3>Overview</h3>
         <a>base IRI</a>. Finally, if the <a>IRI</a> or
         <a>keyword</a> still could not be compacted, it is returned
         as is.</p>
+
+      <p class="changed">In the case were this algorithm would return the input <a>IRI</a> as is,
+        and that <a>IRI</a> can be mistaken for a <a>compact IRI</a> in the <a>active context</a>,
+        this algorithm will raise an error,
+        because it has no way to return an unambiguous representation of the original <a>IRI</a>.</p>
     </section>
 
     <section class="algorithm">
@@ -3516,7 +3521,7 @@ <h3>Algorithm</h3>
           <a data-lt="active context">active context's</a> <a>vocabulary mapping</a>.
           Try to create a <a>compact IRI</a>, starting by initializing
           <var>compact IRI</var> to <code>null</code>. This variable will be used to
-          tore the created <a>compact IRI</a>, if any.</li>
+          store the created <a>compact IRI</a>, if any.</li>
         <li>For each key <a>term</a> and value <a>term definition</a> in
           the <var>active context</var>:
           <ol>
@@ -3543,6 +3548,13 @@ <h3>Algorithm</h3>
           </ol>
         </li>
         <li>If <var>compact IRI</var> is not <code>null</code>, return <var>compact IRI</var>.</li>
+        <li class="changed">To ensure that the <a>absolute IRI</a> <var>var</var> is
+          not confused with a <a>compact IRI</a>,
+          if the <a data-cite="RFC3986#section-3.1">IRI scheme</a> of <var>var</var>
+          matches any term in <a>active context</a> with <a>prefix flag</a> set to <code>true</code>,
+          and <var>var</var> has no <a data-cite="RFC3986#section-3.1">IRI authority</a> (beginning with double-forward-slash (<code>//</code>),
+          an <a data-link-for="JsonLdErrorCode">IRI confused with prefix</a> error has been detected,
+          and processing is aborted.</li>
         <li>If <var>vocab</var> is <code>false</code>,
           transform <var>var</var> to a <a>relative IRI</a> using
           the <span class="changed"><a>base IRI</a> from <var>active context</var>, if it exists</span>.</li>
@@ -5917,6 +5929,7 @@ <h4>JsonLdErrorCode</h4>
             "invalid value object",
             "invalid value object value",
             "invalid vocab mapping",
+            "IRI confused with prefix",
             "keyword redefinition",
             "loading document failed",
             "loading remote context failed",
@@ -6024,6 +6037,9 @@ <h4>JsonLdErrorCode</h4>
         <dt><dfn>invalid vocab mapping</dfn></dt>
         <dd>An invalid <a>vocabulary mapping</a> has been detected,
           i.e., it is neither an <a>IRI</a> nor <code>null</code>.</dd>
+        <dt class="changed"><dfn>IRI confused with prefix</dfn></dt>
+        <dd>When compacting an <a>absolute IRI</a> would result in an <a>absolute IRI</a>
+          which could be confused with a compact IRI (because its <a data-cite="RFC3986#section-3.1">IRI scheme</a> matches a <a>term definition</a> and it has no <a data-cite="RFC3986#section-3.1">IRI authority</a>).</dd>
         <dt><dfn>keyword redefinition</dfn></dt>
         <dd>A <a>keyword</a> redefinition has been detected.</dd>
         <dt><dfn>loading document failed</dfn></dt>
@@ -6190,6 +6206,9 @@ <h2>Changes since JSON-LD Community Group Final Report</h2>
       This allows a mechanism for documenting the content of a context using HTML.</li>
     <li>Consolidate <a>RemoteDocument</a> processing into the <a>LoadDocumentCallback</a>
       including variations on HTML processing.</li>
+    <li>The <a href="#iri-compaction">IRI compaction algorithm</a> may generate an error if the result is an
+      <a>absolute IRI</a> which could be confused with a compact IRI in the
+      <a>active context</a>.</li>
   </ul>
 </section>
 
diff --git a/tests/compact-manifest.jsonld b/tests/compact-manifest.jsonld
index 1a76cef9..cdb24721 100644
--- a/tests/compact-manifest.jsonld
+++ b/tests/compact-manifest.jsonld
@@ -1148,6 +1148,15 @@
       "input": "compact/e001-in.jsonld",
       "context": "compact/e001-context.jsonld",
       "expect": "compaction to list of lists"
+    }, {
+      "@id": "#te002",
+      "@type": [ "jld:NegativeEvaluationTest", "jld:CompactTest" ],
+      "name": "Absolute IRI confused with Compact IRI",
+      "purpose": "Verifies that IRI compaction detects when the result is an absolute IRI with a scheme matching a term.",
+      "option": {"specVersion": "json-ld-1.1"},
+      "input": "compact/e002-in.jsonld",
+      "context": "compact/e002-context.jsonld",
+      "expect": "IRI confused with prefix"
     }, {
       "@id": "#ten01",
       "@type": [ "jld:NegativeEvaluationTest", "jld:CompactTest" ],
diff --git a/tests/compact/e002-context.jsonld b/tests/compact/e002-context.jsonld
new file mode 100644
index 00000000..10ed9c17
--- /dev/null
+++ b/tests/compact/e002-context.jsonld
@@ -0,0 +1,5 @@
+{
+  "@context": {
+    "tag": "http://example.org/ns/tag/"
+  }
+}
\ No newline at end of file
diff --git a/tests/compact/e002-in.jsonld b/tests/compact/e002-in.jsonld
new file mode 100644
index 00000000..6d4b8011
--- /dev/null
+++ b/tests/compact/e002-in.jsonld
@@ -0,0 +1,3 @@
+[{
+  "tag:champin.net,2019:prop": {"@value": "hello world"}
+}]
\ No newline at end of file