diff --git a/crates/aiken-lang/src/ast.rs b/crates/aiken-lang/src/ast.rs
index 6953f6a0..4487e7b0 100644
--- a/crates/aiken-lang/src/ast.rs
+++ b/crates/aiken-lang/src/ast.rs
@@ -118,6 +118,7 @@ fn str_to_keyword(word: &str) -> Option<Token> {
         "test" => Some(Token::Test),
         "error" => Some(Token::ErrorTerm),
         "validator" => Some(Token::Validator),
+        "fail" => Some(Token::Fail),
         _ => None,
     }
 }
@@ -136,6 +137,7 @@ pub struct Function<T, Expr> {
     pub return_annotation: Option<Annotation>,
     pub return_type: T,
     pub end_position: usize,
+    pub can_error: bool,
 }
 
 pub type TypedTypeAlias = TypeAlias<Arc<Type>>;
diff --git a/crates/aiken-lang/src/builtins.rs b/crates/aiken-lang/src/builtins.rs
index b6e8dca5..12d8622c 100644
--- a/crates/aiken-lang/src/builtins.rs
+++ b/crates/aiken-lang/src/builtins.rs
@@ -681,6 +681,7 @@ pub fn prelude_functions(id_gen: &IdGenerator) -> IndexMap<FunctionAccessKey, Ty
                 annotation: None,
                 tipo: bool(),
             }],
+            can_error: false,
             doc: None,
             location: Span::empty(),
             name: "not".to_string(),
@@ -731,6 +732,7 @@ pub fn prelude_functions(id_gen: &IdGenerator) -> IndexMap<FunctionAccessKey, Ty
                 annotation: None,
                 tipo: a_var.clone(),
             }],
+            can_error: false,
             body: TypedExpr::Var {
                 location: Span::empty(),
                 constructor: ValueConstructor {
@@ -766,6 +768,7 @@ pub fn prelude_functions(id_gen: &IdGenerator) -> IndexMap<FunctionAccessKey, Ty
             variant_name: "".to_string(),
         },
         Function {
+            can_error: false,
             arguments: vec![
                 Arg {
                     arg_name: ArgName::Named {
@@ -828,6 +831,7 @@ pub fn prelude_functions(id_gen: &IdGenerator) -> IndexMap<FunctionAccessKey, Ty
             variant_name: "".to_string(),
         },
         Function {
+            can_error: false,
             arguments: vec![Arg {
                 arg_name: ArgName::Named {
                     name: "f".to_string(),
diff --git a/crates/aiken-lang/src/parser.rs b/crates/aiken-lang/src/parser.rs
index fce31991..9ac01e75 100644
--- a/crates/aiken-lang/src/parser.rs
+++ b/crates/aiken-lang/src/parser.rs
@@ -10,7 +10,7 @@ use crate::{
     },
     expr,
 };
-use chumsky::prelude::*;
+use chumsky::{chain::Chain, prelude::*};
 use error::ParseError;
 use extra::ModuleExtra;
 use token::Token;
@@ -73,7 +73,8 @@ pub fn module(
         result
     });
 
-    let definitions = module_parser().parse(chumsky::Stream::from_iter(span(len), tokens))?;
+    let definitions =
+        module_parser().parse(chumsky::Stream::from_iter(span(tokens.len()), tokens))?;
 
     let module = ast::UntypedModule {
         kind,
@@ -329,6 +330,7 @@ pub fn fn_parser() -> impl Parser<Token, ast::UntypedDefinition, Error = ParseEr
                     public: opt_pub.is_some(),
                     return_annotation,
                     return_type: (),
+                    can_error: true,
                 })
             },
         )
@@ -336,7 +338,8 @@ pub fn fn_parser() -> impl Parser<Token, ast::UntypedDefinition, Error = ParseEr
 
 pub fn test_parser() -> impl Parser<Token, ast::UntypedDefinition, Error = ParseError> {
     just(Token::Test)
-        .ignore_then(select! {Token::Name {name} => name})
+        .ignore_then(just(Token::Fail).ignored().or_not())
+        .then(select! {Token::Name {name} => name})
         .then_ignore(just(Token::LeftParen))
         .then_ignore(just(Token::RightParen))
         .map_with_span(|name, span| (name, span))
@@ -345,7 +348,7 @@ pub fn test_parser() -> impl Parser<Token, ast::UntypedDefinition, Error = Parse
                 .or_not()
                 .delimited_by(just(Token::LeftBrace), just(Token::RightBrace)),
         )
-        .map_with_span(|((name, span_end), body), span| {
+        .map_with_span(|(((fail, name), span_end), body), span| {
             ast::UntypedDefinition::Test(ast::Function {
                 arguments: vec![],
                 body: body.unwrap_or_else(|| expr::UntypedExpr::todo(span, None)),
@@ -356,6 +359,7 @@ pub fn test_parser() -> impl Parser<Token, ast::UntypedDefinition, Error = Parse
                 public: false,
                 return_annotation: None,
                 return_type: (),
+                can_error: fail.is_some(),
             })
         })
 }
diff --git a/crates/aiken-lang/src/parser/lexer.rs b/crates/aiken-lang/src/parser/lexer.rs
index 3587c37f..37058e41 100644
--- a/crates/aiken-lang/src/parser/lexer.rs
+++ b/crates/aiken-lang/src/parser/lexer.rs
@@ -115,6 +115,7 @@ pub fn lexer() -> impl Parser<char, Vec<(Token, Span)>, Error = ParseError> {
         "todo" => Token::Todo,
         "type" => Token::Type,
         "when" => Token::When,
+        "fail" => Token::Fail,
         "validator" => Token::Validator,
         _ => {
             if s.chars().next().map_or(false, |c| c.is_uppercase()) {
diff --git a/crates/aiken-lang/src/parser/token.rs b/crates/aiken-lang/src/parser/token.rs
index b06a4783..1fe4418b 100644
--- a/crates/aiken-lang/src/parser/token.rs
+++ b/crates/aiken-lang/src/parser/token.rs
@@ -80,6 +80,7 @@ pub enum Token {
     When,
     Trace,
     Validator,
+    Fail,
 }
 
 impl fmt::Display for Token {
@@ -164,6 +165,7 @@ impl fmt::Display for Token {
             Token::Test => "test",
             Token::ErrorTerm => "error",
             Token::Validator => "validator",
+            Token::Fail => "fail",
         };
         write!(f, "\"{s}\"")
     }
diff --git a/crates/aiken-lang/src/tests/parser.rs b/crates/aiken-lang/src/tests/parser.rs
index 579a7a78..b2a0b4de 100644
--- a/crates/aiken-lang/src/tests/parser.rs
+++ b/crates/aiken-lang/src/tests/parser.rs
@@ -38,6 +38,60 @@ fn windows_newline() {
     )
 }
 
+#[test]
+fn test_fail() {
+    let code = indoc! {r#"
+       test fail invalid_inputs() {
+         expect True = False
+
+         False
+       }
+    "#};
+
+    assert_definitions(
+        code,
+        vec![ast::UntypedDefinition::Test(ast::Function {
+            arguments: vec![],
+            body: expr::UntypedExpr::Sequence {
+                location: Span::new((), 31..59),
+                expressions: vec![
+                    expr::UntypedExpr::Assignment {
+                        location: Span::new((), 31..50),
+                        value: Box::new(expr::UntypedExpr::Var {
+                            location: Span::new((), 45..50),
+                            name: "False".to_string(),
+                        }),
+                        pattern: ast::UntypedPattern::Constructor {
+                            is_record: false,
+                            location: Span::new((), 38..42),
+                            name: "True".to_string(),
+                            arguments: vec![],
+                            module: None,
+                            constructor: (),
+                            with_spread: false,
+                            tipo: (),
+                        },
+                        kind: ast::AssignmentKind::Expect,
+                        annotation: None,
+                    },
+                    expr::UntypedExpr::Var {
+                        location: Span::new((), 54..59),
+                        name: "False".to_string(),
+                    },
+                ],
+            },
+            doc: None,
+            location: Span::new((), 0..26),
+            name: "invalid_inputs".to_string(),
+            public: false,
+            return_annotation: None,
+            return_type: (),
+            end_position: 60,
+            can_error: true,
+        })],
+    );
+}
+
 #[test]
 fn validator() {
     let code = indoc! {r#"
@@ -54,6 +108,7 @@ fn validator() {
             doc: None,
             end_position: 54,
             fun: Function {
+                can_error: true,
                 arguments: vec![
                     ast::Arg {
                         arg_name: ast::ArgName::Named {
@@ -128,6 +183,7 @@ fn double_validator() {
             doc: None,
             end_position: 90,
             fun: Function {
+                can_error: true,
                 arguments: vec![
                     ast::Arg {
                         arg_name: ast::ArgName::Named {
@@ -176,6 +232,7 @@ fn double_validator() {
                 end_position: 52,
             },
             other_fun: Some(Function {
+                can_error: true,
                 arguments: vec![
                     ast::Arg {
                         arg_name: ast::ArgName::Named {
@@ -487,6 +544,7 @@ fn empty_function() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Trace {
                 kind: ast::TraceKind::Todo,
@@ -522,6 +580,7 @@ fn expect() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 19..69),
@@ -592,6 +651,7 @@ fn plus_binop() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![ast::Arg {
                 arg_name: ast::ArgName::Named {
                     label: "a".to_string(),
@@ -644,6 +704,7 @@ fn pipeline() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![ast::Arg {
                 arg_name: ast::ArgName::Named {
                     name: "a".to_string(),
@@ -715,6 +776,7 @@ fn if_expression() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::If {
                 location: Span::new((), 13..106),
@@ -813,6 +875,7 @@ fn let_bindings() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![ast::Arg {
                 arg_name: ast::ArgName::Named {
                     label: "a".to_string(),
@@ -940,6 +1003,7 @@ fn block() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![ast::Arg {
                 arg_name: ast::ArgName::Named {
                     label: "a".to_string(),
@@ -1034,6 +1098,7 @@ fn when() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![ast::Arg {
                 arg_name: ast::ArgName::Named {
                     label: "a".to_string(),
@@ -1159,6 +1224,7 @@ fn anonymous_function() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 25..83),
@@ -1252,6 +1318,7 @@ fn field_access() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![ast::Arg {
                 arg_name: ast::ArgName::Named {
                     label: "user".to_string(),
@@ -1302,6 +1369,7 @@ fn call() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 15..108),
@@ -1461,6 +1529,7 @@ fn record_update() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![
                 ast::Arg {
                     arg_name: ast::ArgName::Named {
@@ -1555,6 +1624,7 @@ fn record_create_labeled() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(ast::Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Call {
                 arguments: vec![
@@ -1612,6 +1682,7 @@ fn record_create_labeled_with_field_access() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(ast::Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Call {
                 arguments: vec![
@@ -1673,6 +1744,7 @@ fn record_create_unlabeled() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(ast::Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Call {
                 arguments: vec![
@@ -1726,6 +1798,7 @@ fn parse_tuple() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 13..85),
@@ -1829,6 +1902,7 @@ fn parse_tuple2() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 13..38),
@@ -1957,6 +2031,7 @@ fn base16_bytearray_literals() {
                 tipo: (),
             }),
             ast::UntypedDefinition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::BinOp {
                     location: Span::new((), 55..80),
@@ -1992,6 +2067,7 @@ fn function_def() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             doc: None,
             arguments: vec![],
             body: expr::UntypedExpr::Trace {
@@ -2026,6 +2102,7 @@ fn function_invoke() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             doc: None,
             arguments: vec![],
             body: expr::UntypedExpr::Assignment {
@@ -2089,6 +2166,7 @@ fn function_ambiguous_sequence() {
         code,
         vec![
             ast::UntypedDefinition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::Sequence {
                     location: Span::new((), 15..32),
@@ -2121,6 +2199,7 @@ fn function_ambiguous_sequence() {
                 end_position: 34,
             }),
             ast::UntypedDefinition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::Sequence {
                     location: Span::new((), 52..69),
@@ -2153,6 +2232,7 @@ fn function_ambiguous_sequence() {
                 end_position: 71,
             }),
             ast::UntypedDefinition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::Assignment {
                     location: Span::new((), 89..103),
@@ -2184,6 +2264,7 @@ fn function_ambiguous_sequence() {
                 end_position: 104,
             }),
             ast::UntypedDefinition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::Sequence {
                     location: Span::new((), 122..153),
@@ -2296,6 +2377,7 @@ fn tuple_pattern() {
     assert_definitions(
         code,
         vec![ast::UntypedDefinition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::When {
                 location: Span::new((), 13..49),
@@ -2349,6 +2431,7 @@ fn subtraction_vs_negate() {
     assert_definitions(
         code,
         vec![ast::Definition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 14..61),
@@ -2465,6 +2548,7 @@ fn clause_guards() {
     assert_definitions(
         code,
         vec![ast::Definition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::When {
                 location: Span::new((), 13..250),
@@ -2719,6 +2803,7 @@ fn scope_logical_expression() {
     assert_definitions(
         code,
         vec![ast::Definition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 13..61),
@@ -2817,6 +2902,7 @@ fn trace_expressions() {
     assert_definitions(
         code,
         vec![ast::Definition::Fn(Function {
+            can_error: true,
             arguments: vec![],
             body: expr::UntypedExpr::Sequence {
                 location: Span::new((), 13..131),
@@ -2942,6 +3028,7 @@ fn parse_keyword_error() {
         code,
         vec![
             ast::Definition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::Trace {
                     kind: ast::TraceKind::Error,
@@ -2963,6 +3050,7 @@ fn parse_keyword_error() {
                 end_position: 38,
             }),
             ast::Definition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::When {
                     location: Span::new((), 54..110),
@@ -3041,6 +3129,7 @@ fn parse_keyword_todo() {
         code,
         vec![
             ast::Definition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::Trace {
                     kind: ast::TraceKind::Todo,
@@ -3062,6 +3151,7 @@ fn parse_keyword_todo() {
                 end_position: 37,
             }),
             ast::Definition::Fn(Function {
+                can_error: true,
                 arguments: vec![],
                 body: expr::UntypedExpr::When {
                     location: Span::new((), 53..121),
diff --git a/crates/aiken-lang/src/tipo/environment.rs b/crates/aiken-lang/src/tipo/environment.rs
index ebbe794a..aed4a266 100644
--- a/crates/aiken-lang/src/tipo/environment.rs
+++ b/crates/aiken-lang/src/tipo/environment.rs
@@ -197,6 +197,7 @@ impl<'a> Environment<'a> {
                 return_annotation,
                 return_type,
                 end_position,
+                can_error,
             }) => {
                 // Lookup the inferred function information
                 let function = self
@@ -241,6 +242,7 @@ impl<'a> Environment<'a> {
                     return_type,
                     body,
                     end_position,
+                    can_error,
                 })
             }
 
diff --git a/crates/aiken-lang/src/tipo/infer.rs b/crates/aiken-lang/src/tipo/infer.rs
index e63586e7..19288ac6 100644
--- a/crates/aiken-lang/src/tipo/infer.rs
+++ b/crates/aiken-lang/src/tipo/infer.rs
@@ -160,6 +160,7 @@ fn infer_definition(
             body,
             return_annotation,
             end_position,
+            can_error,
             ..
         }) => {
             if public && kind.is_validator() {
@@ -246,6 +247,7 @@ fn infer_definition(
                     .return_type()
                     .expect("Could not find return type for fn"),
                 body,
+                can_error,
                 end_position,
             }))
         }
diff --git a/crates/aiken-project/src/lib.rs b/crates/aiken-project/src/lib.rs
index b97749a0..afa9edf4 100644
--- a/crates/aiken-project/src/lib.rs
+++ b/crates/aiken-project/src/lib.rs
@@ -670,7 +670,12 @@ where
         let mut programs = Vec::new();
 
         for (input_path, module_name, func_def) in scripts {
-            let Function { name, body, .. } = func_def;
+            let Function {
+                name,
+                body,
+                can_error,
+                ..
+            } = func_def;
 
             if verbose {
                 self.event_listener.handle_event(Event::GeneratingUPLCFor {
@@ -711,6 +716,7 @@ where
                 input_path,
                 module_name,
                 name.to_string(),
+                *can_error,
                 program.try_into().unwrap(),
                 evaluation_hint,
             );
@@ -737,7 +743,7 @@ where
                 let mut eval_result = script.program.clone().eval(initial_budget);
 
                 EvalInfo {
-                    success: !eval_result.failed(),
+                    success: !eval_result.failed(script.can_error),
                     script,
                     spent_budget: eval_result.cost(),
                     logs: eval_result.logs(),
diff --git a/crates/aiken-project/src/script.rs b/crates/aiken-project/src/script.rs
index dd7539a6..58b83882 100644
--- a/crates/aiken-project/src/script.rs
+++ b/crates/aiken-project/src/script.rs
@@ -8,6 +8,7 @@ pub struct Script {
     pub input_path: PathBuf,
     pub module: String,
     pub name: String,
+    pub can_error: bool,
     pub program: Program<NamedDeBruijn>,
     pub evaluation_hint: Option<EvalHint>,
 }
@@ -19,6 +20,7 @@ impl Script {
         input_path: PathBuf,
         module: String,
         name: String,
+        can_error: bool,
         program: Program<NamedDeBruijn>,
         evaluation_hint: Option<EvalHint>,
     ) -> Script {
@@ -27,6 +29,7 @@ impl Script {
             module,
             name,
             program,
+            can_error,
             evaluation_hint,
         }
     }
diff --git a/crates/aiken-project/src/tests/gen_uplc.rs b/crates/aiken-project/src/tests/gen_uplc.rs
index abfba2c8..044b87ba 100644
--- a/crates/aiken-project/src/tests/gen_uplc.rs
+++ b/crates/aiken-project/src/tests/gen_uplc.rs
@@ -80,7 +80,7 @@ fn assert_uplc(source_code: &str, expected: Term<Name>, should_fail: bool) {
             let mut eval = debruijn_program.eval(ExBudget::default());
 
             assert_eq!(
-                eval.failed(),
+                eval.failed(false),
                 should_fail,
                 "logs - {}\n",
                 format!("{:#?}", eval.logs())
diff --git a/crates/uplc/src/machine/eval_result.rs b/crates/uplc/src/machine/eval_result.rs
index 468ebce9..c35c860b 100644
--- a/crates/uplc/src/machine/eval_result.rs
+++ b/crates/uplc/src/machine/eval_result.rs
@@ -32,10 +32,14 @@ impl EvalResult {
         std::mem::take(&mut self.logs)
     }
 
-    pub fn failed(&self) -> bool {
-        matches!(self.result, Err(_))
-            || matches!(self.result, Ok(Term::Error))
-            || matches!(self.result, Ok(Term::Constant(ref con)) if matches!(con.as_ref(), Constant::Bool(false)))
+    pub fn failed(&self, can_error: bool) -> bool {
+        if can_error {
+            !matches!(self.result, Err(_))
+        } else {
+            matches!(self.result, Err(_))
+                || matches!(self.result, Ok(Term::Error))
+                || matches!(self.result, Ok(Term::Constant(ref con)) if matches!(con.as_ref(), Constant::Bool(false)))
+        }
     }
 
     pub fn result(self) -> Result<Term<NamedDeBruijn>, Error> {