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I have a custom Manage Metadata field which is hooked up on a TermStore which has an Open Submission Policy and the field itself has Allow multiple value + Fill-in choices enabled (Checked).

Yet when I try to create or edit an item and fill-in a new term which I want in the termset, I get the error You must specify a valid field value.

Any ideas?

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Adding a new term is available through the "Add new item" link in the term picker dialog. It's access from the pair of luggage tags next to the term entry text box.

An example Term Picker Dialog box with Add New Item link highlighted

For more information, there is a similar question and answer on the Microsoft SharePoint Forums.

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