This article presents a detailed formal approach to concepts and concept combination. Sense generation is a competence‐level theory that attempts to respect constraints from the various cognitive sciences, and postulates “quasi‐classical” conceptual structures where attributes receive only one value (but are defeasible and so do not represent necessary and sufficient conditions on category membership) and where classification is binary (but explicitly context‐sensitive). It is also argued that any general theory of concepts must account for “privative” combinations (e.g., stone lion, fake (...) gun, apparent friend) as extreme test‐cases of representational and classificatory flexibility. The approach presented therefore provides a treatment of these combinations. The approach differentiates between the “lexical concept” (the stable information represented in a mental lexicon) which acts as a base from which the various “senses” (flexible contents associated with words and phrases in context, and used in classification) are “generated.” Generation allows nonmonotonicity, so that in different circumstances, different attributes may be defeated or modified. Classification is treated as relative to the perspective adopted, so that a classification acceptable from one perspective may be unacceptable from another, without contradiction. The result is a view that assumes bottom‐up priority in concept combination, where the range of senses generated by bottom‐up rules of combination is tempered by pragmatic‐communicative constraints on classification. An account of the representational and classification behavior of privative combinations is outlined, and the article concludes with a discussion of some of the implications of the approach. (shrink)