diff --git a/src/bin/expect_tests/contract_tests.ml b/src/bin/expect_tests/contract_tests.ml
index 795e554ea..0706ceda8 100644
--- a/src/bin/expect_tests/contract_tests.ml
+++ b/src/bin/expect_tests/contract_tests.ml
@@ -1149,7 +1149,7 @@ let%expect_test _ =
 let%expect_test _ =
   run_ligo_bad [ "compile-contract" ; bad_contract "create_contract_toplevel.mligo" ; "main" ] ;
   [%expect {|
-    ligo: in file "create_contract_toplevel.mligo", line 4, character 35 to line 8, character 8. No free variable allowed in this lambda: store  {"expression":"CREATE_CONTRACT(lambda (#P : ( nat * string ):Some(( nat * string ))) : None return let rhs#752 = #P in let p = rhs#752.0 in let s = rhs#752.1 in ( list[] : (TO_list(operation)) , store ) , NONE() : (TO_option(key_hash)) , 300000000mutez , \"un\")","location":"in file \"create_contract_toplevel.mligo\", line 4, character 35 to line 8, character 8"}
+    ligo: in file "create_contract_toplevel.mligo", line 4, character 35 to line 8, character 8. No free variable allowed in this lambda: variable 'store' {"expression":"CREATE_CONTRACT(lambda (#P : ( nat * string ):Some(( nat * string ))) : None return let rhs#752 = #P in let p = rhs#752.0 in let s = rhs#752.1 in ( list[] : (TO_list(operation)) , store ) , NONE() : (TO_option(key_hash)) , 300000000mutez , \"un\")","location":"in file \"create_contract_toplevel.mligo\", line 4, character 35 to line 8, character 8"}
 
 
      If you're not sure how to fix this error, you can
@@ -1162,7 +1162,7 @@ let%expect_test _ =
 
   run_ligo_bad [ "compile-contract" ; bad_contract "create_contract_var.mligo" ; "main" ] ;
   [%expect {|
-    ligo: in file "create_contract_var.mligo", line 6, character 35 to line 10, character 5. No free variable allowed in this lambda: a  {"expression":"CREATE_CONTRACT(lambda (#P : ( nat * int ):Some(( nat * int ))) : None return let rhs#755 = #P in let p = rhs#755.0 in let s = rhs#755.1 in ( list[] : (TO_list(operation)) , a ) , NONE() : (TO_option(key_hash)) , 300000000mutez , 1)","location":"in file \"create_contract_var.mligo\", line 6, character 35 to line 10, character 5"}
+    ligo: in file "create_contract_var.mligo", line 6, character 35 to line 10, character 5. No free variable allowed in this lambda: variable 'a' {"expression":"CREATE_CONTRACT(lambda (#P : ( nat * int ):Some(( nat * int ))) : None return let rhs#755 = #P in let p = rhs#755.0 in let s = rhs#755.1 in ( list[] : (TO_list(operation)) , a ) , NONE() : (TO_option(key_hash)) , 300000000mutez , 1)","location":"in file \"create_contract_var.mligo\", line 6, character 35 to line 10, character 5"}
 
 
      If you're not sure how to fix this error, you can
@@ -1172,6 +1172,20 @@ let%expect_test _ =
     * Ask a question on our Discord: https://discord.gg/9rhYaEt
     * Open a gitlab issue: https://gitlab.com/ligolang/ligo/issues/new
     * Check the changelog by running 'ligo changelog' |}] ;
+
+  run_ligo_bad [ "compile-contract" ; bad_contract "create_contract_no_inline.mligo" ; "main" ] ;
+  [%expect {|
+    ligo: in file "create_contract_no_inline.mligo", line 9, characters 19-89. CREATE_CONTRACT first argument must be inlined: contract code can be inlined using a lambda {"expression":"CREATE_CONTRACT(dummy_contract , NONE() : (TO_option(key_hash)) , 300000000mutez , 1)","location":"in file \"create_contract_no_inline.mligo\", line 9, characters 19-89"}
+
+
+     If you're not sure how to fix this error, you can
+     do one of the following:
+
+    * Visit our documentation: https://ligolang.org/docs/intro/what-and-why/
+    * Ask a question on our Discord: https://discord.gg/9rhYaEt
+    * Open a gitlab issue: https://gitlab.com/ligolang/ligo/issues/new
+    * Check the changelog by running 'ligo changelog' |}] ;
+
   run_ligo_good [ "compile-contract" ; contract "create_contract.mligo" ; "main" ] ;
   [%expect {|
     { parameter string ;
diff --git a/src/test/contracts/negative/create_contract_no_inline.mligo b/src/test/contracts/negative/create_contract_no_inline.mligo
new file mode 100644
index 000000000..ba5a30cd0
--- /dev/null
+++ b/src/test/contracts/negative/create_contract_no_inline.mligo
@@ -0,0 +1,11 @@
+let foo : int = 42
+
+let dummy_contract (p, s : nat * int) : return =
+ (([] : operation list), foo)
+
+type return = operation list * string
+
+let main (action, store : int * int) : return =
+  let (op, addr) = Tezos.create_contract dummy_contract ((None: key_hash option)) 300tz 1 in
+  let toto : operation list = [ op ] in
+  (toto, foo)