diff --git a/gitlab-pages/docs/advanced/entrypoints-contracts.md b/gitlab-pages/docs/advanced/entrypoints-contracts.md
index 499d07c58..c2232e494 100644
--- a/gitlab-pages/docs/advanced/entrypoints-contracts.md
+++ b/gitlab-pages/docs/advanced/entrypoints-contracts.md
@@ -310,7 +310,7 @@ let main (action, store: parameter * storage) : return =
 ```reasonligo group=c
 let owner : address = ("tz1KqTpEZ7Yob7QbPE4Hy4Wo8fHG8LhKxZSx": address);
 
-let main = ((action, store) : (parameter, storage)) : storage => {
+let main = ((action, store) : (parameter, storage)) : return => {
   if (Tezos.source != owner) { (failwith ("Access denied.") : return); }
   else { (([] : list (operation)), store); };
 };
@@ -478,4 +478,3 @@ let proxy = ((action, store): (parameter, storage)) : return => {
 > *deprecated*.
 
 </Syntax>
-
diff --git a/src/passes/1-parser/reasonligo/Parser.mly b/src/passes/1-parser/reasonligo/Parser.mly
index defde2e55..d24e3f832 100644
--- a/src/passes/1-parser/reasonligo/Parser.mly
+++ b/src/passes/1-parser/reasonligo/Parser.mly
@@ -558,9 +558,13 @@ fun_expr:
             in raise (Error (WrongFunctionArguments e))
     in
     let binders = fun_args_to_pattern $1 in
+    let lhs_type = match $1 with 
+      EAnnot {value = {inside = _ , _, t; _}; region = r} -> Some (r,t)
+      | _ -> None
+    in
     let f = {kwd_fun;
              binders;
-             lhs_type=None;
+             lhs_type;
              arrow;
              body
             }
diff --git a/src/passes/2-simplify/cameligo.ml b/src/passes/2-simplify/cameligo.ml
index 910da246f..569df20b3 100644
--- a/src/passes/2-simplify/cameligo.ml
+++ b/src/passes/2-simplify/cameligo.ml
@@ -828,6 +828,18 @@ and simpl_declaration : Raw.declaration -> declaration Location.wrap list result
           ok (Raw.EFun {region=Region.ghost ; value=fun_},List.fold_right' aux lhs_type' ty)
       in
       let%bind rhs' = simpl_expression let_rhs in
+      let%bind lhs_type = match lhs_type with 
+      | None -> (match let_rhs with 
+        | EFun {value={binders;lhs_type}} -> 
+          let f_args = nseq_to_list (binders) in
+          let%bind lhs_type' = bind_map_option (fun x -> simpl_type_expression (snd x)) lhs_type in
+          let%bind ty = bind_map_list typed_pattern_to_typed_vars f_args in
+          let aux acc ty = Option.map (t_function (snd ty)) acc in
+          ok @@ (List.fold_right' aux lhs_type' ty)
+        | _ -> ok None
+        )
+      | Some t -> ok @@ Some t
+      in
       ok @@ [loc x @@ (Declaration_constant (Var.of_name var.value , lhs_type , inline, rhs'))]
     )
 
diff --git a/src/test/contracts/balance_constant.religo b/src/test/contracts/balance_constant.religo
index 1d136052b..33c1fd725 100644
--- a/src/test/contracts/balance_constant.religo
+++ b/src/test/contracts/balance_constant.religo
@@ -12,7 +12,7 @@ generated. unrecognized constant: {"constant":"BALANCE","location":"generated"}
 
 type storage = tez;
 
-let main2 = (p : unit, storage) =>
+let main2 = (p : unit, s: storage) =>
   ([]: list (operation), Tezos.balance);
 
 let main = (x : (unit, storage)) => main2 (x[0], x[1]);
diff --git a/src/test/contracts/set_arithmetic.religo b/src/test/contracts/set_arithmetic.religo
index a219fba9b..ed8f7a075 100644
--- a/src/test/contracts/set_arithmetic.religo
+++ b/src/test/contracts/set_arithmetic.religo
@@ -6,10 +6,10 @@ let literal_op = (p: unit) : set (string) =>
 let add_op = (s: set (string)) : set (string) =>
   Set.add ("foobar", s);
 
-let remove_op = (s: set (string)) : set(string) =>
+let remove_op = (s: set (string)) : set (string) =>
   Set.remove ("foobar", s);
 
-let remove_deep = (s: (set (string), nat)): (set (string), nat) =>
+let remove_deep = (s: (set (string), nat)): set (string) =>
   Set.remove ("foobar", s[0]);
 
 let mem_op = (s: set (string)) : bool =>