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Embodied agents, such as robots, will need to interact in situated environments and reason over social norms to achieve naturalistic communication with humans. Reference resolution is a critical aspect of this interaction that involves handling normative expectations that come with situated interaction. However, there are no normative reasoning benchmarks for reference resolution, and it remains an understudied capability. To address this gap, we introduce SNIC (Situated Norms in Context): a human-validated benchmark for norm-based reference resolution (NBRR) focused on physically grounded norms that arise in everyday social contexts. We investigate state-of-the-art Large Language Models (LLMs) for normative reasoning to test how these models can extract and utilize normative principles relevant to reference resolution. We find that LLMs generally struggle to consistently extract and reason with social norms and norm conflicts for reference resolution across contexts when social norms are not explicitly given. Overall, this research highlights a blind spot for state-of-the-art LLMs and informs work on reasoning with text-based physically situated norms.
