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The reason this is happening is due to the child elements being floated and following proscribed behavior,escaping their parents boundaries, the li item height is less than it’s floated child element thus the li elements can’t float fully to the left as the child element drops below each list bottom edge.

Clearing solves this but also containing floats does and ensures that the parent is forced to extend it’s boundaries to include the floats using ‘overflow:hidden;’