Hall explains this when he states "decoding within the negotiated version contains a mixture of adaptive and oppositional elements: it acknowledges the legitimacy of the hegemonic definitions to make the grand significations (abstract), while, at a more restricted, situational (situated) level, it makes its own ground rules- it operates with exceptions to the rule".  Basically, this means that people understand the dominant position, they generally believe the position, but they are in a situation where they must make up their own separate rules to coexist with the dominant position. Hall provides an example involving an Industrial Relations Bill. In his example, he shows how a factory worker may recognize and agree with the dominant position that a wage freeze is beneficial. However, while the worker may recognize that the wage freeze is needed, they may not be willing to partake in a wage freeze since it will directly affect them rather than others  His example demonstrates that people may negotiate a code to work around their own beliefs and self-interests. This code is very much based on context.