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The paper extends a Hansson-Lewis style preference semantics for dyadic deontic logic by incorporating a nonmonotonic reasoning mechanism that enables previously derived obligations to be withdrawn when new, potentially conflicting information comes in. The account is bi-preferential: two orderings--ideality and normality--on worlds are employed to address shortcomings in earlier approaches, with a separate ranking method for each. At the nonmonotonic layer, a number of postulates are considered, including antecedent strengthening, inclusion and no-drowning. 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