diff --git a/yarn-project/end-to-end/src/e2e_fees.test.ts b/yarn-project/end-to-end/src/e2e_fees.test.ts
index 061d60a9ab0..992467ee5cc 100644
--- a/yarn-project/end-to-end/src/e2e_fees.test.ts
+++ b/yarn-project/end-to-end/src/e2e_fees.test.ts
@@ -286,20 +286,6 @@ describe('e2e_fees', () => {
     const MaxFee = FeeAmount + RefundAmount;
     const { wallets } = e2eContext;
 
-    // const [initialAlicePrivateBananas, initialFPCPrivateBananas] = await bananaPrivateBalances(
-    //   aliceAddress,
-    //   bananaFPC.address,
-    // );
-    // const [initialAlicePublicBananas, initialFPCPublicBananas] = await bananaPublicBalances(
-    //   aliceAddress,
-    //   bananaFPC.address,
-    // );
-    // const [initialAliceGas, initialFPCGas, initialSequencerGas] = await gasBalances(
-    //   aliceAddress,
-    //   bananaFPC.address,
-    //   sequencerAddress,
-    // );
-
     // simulation throws an error when setup fails
     await expect(
       bananaCoin.methods
@@ -328,6 +314,78 @@ describe('e2e_fees', () => {
     ).rejects.toThrow(/Transaction [0-9a-f]{64} was dropped\. Reason: Tx dropped by P2P node\./);
   });
 
+  it('fails transaction that error in teardown', async () => {
+    /**
+     * We trigger an error in teardown by having the FPC authorize a transfer of its entire balance to Alice
+     * as part of app logic. This will cause the FPC to not have enough funds to pay the refund back to Alice.
+     */
+
+    const PublicMintedAlicePublicBananas = 1000n;
+    const FeeAmount = 1n;
+    const RefundAmount = 2n;
+    const MaxFee = FeeAmount + RefundAmount;
+    const { wallets } = e2eContext;
+
+    const [initialAlicePrivateBananas, initialFPCPrivateBananas] = await bananaPrivateBalances(
+      aliceAddress,
+      bananaFPC.address,
+    );
+    const [initialAlicePublicBananas, initialFPCPublicBananas] = await bananaPublicBalances(
+      aliceAddress,
+      bananaFPC.address,
+    );
+    const [initialAliceGas, initialFPCGas, initialSequencerGas] = await gasBalances(
+      aliceAddress,
+      bananaFPC.address,
+      sequencerAddress,
+    );
+
+    await bananaCoin.methods.mint_public(aliceAddress, PublicMintedAlicePublicBananas).send().wait();
+
+    await expect(
+      bananaCoin.methods
+        .mint_public(aliceAddress, 1n) // random operation
+        .send({
+          fee: {
+            maxFee: MaxFee,
+            paymentMethod: new BuggedTeardownFeePaymentMethod(bananaCoin.address, bananaFPC.address, wallets[0]),
+          },
+        })
+        .wait(),
+    ).rejects.toThrow(/invalid nonce/);
+
+    // node also drops
+    await expect(
+      bananaCoin.methods
+        .mint_public(aliceAddress, 1n) // random operation
+        .send({
+          skipPublicSimulation: true,
+          fee: {
+            maxFee: MaxFee,
+            paymentMethod: new BuggedTeardownFeePaymentMethod(bananaCoin.address, bananaFPC.address, wallets[0]),
+          },
+        })
+        .wait(),
+    ).rejects.toThrow(/Transaction [0-9a-f]{64} was dropped\. Reason: Tx dropped by P2P node\./);
+
+    // nothing happened
+    await expectMapping(
+      bananaPrivateBalances,
+      [aliceAddress, bananaFPC.address, sequencerAddress],
+      [initialAlicePrivateBananas, initialFPCPrivateBananas, 0n],
+    );
+    await expectMapping(
+      bananaPublicBalances,
+      [aliceAddress, bananaFPC.address, sequencerAddress],
+      [initialAlicePublicBananas + PublicMintedAlicePublicBananas, initialFPCPublicBananas, 0n],
+    );
+    await expectMapping(
+      gasBalances,
+      [aliceAddress, bananaFPC.address, sequencerAddress],
+      [initialAliceGas, initialFPCGas, initialSequencerGas],
+    );
+  });
+
   function logFunctionSignatures(artifact: ContractArtifact, logger: DebugLogger) {
     artifact.functions.forEach(fn => {
       const sig = decodeFunctionSignature(fn.name, fn.parameters);
@@ -397,3 +455,49 @@ class BuggedSetupFeePaymentMethod extends PublicFeePaymentMethod {
     ]);
   }
 }
+
+class BuggedTeardownFeePaymentMethod extends PublicFeePaymentMethod {
+  async getFunctionCalls(maxFee: Fr): Promise<FunctionCall[]> {
+    // authorize the FPC to take the max fee from Alice
+    const nonce = Fr.random();
+    const messageHash1 = computeAuthWitMessageHash(this.paymentContract, {
+      args: [this.wallet.getAddress(), this.paymentContract, maxFee, nonce],
+      functionData: new FunctionData(
+        FunctionSelector.fromSignature('transfer_public((Field),(Field),Field,Field)'),
+        false,
+        false,
+        false,
+      ),
+      to: this.asset,
+    });
+
+    // authorize the FPC to take the maxFee
+    // do this first because we only get 2 feepayload calls
+    await this.wallet.setPublicAuth(messageHash1, true).send().wait();
+
+    return Promise.resolve([
+      // in this, we're actually paying the fee in setup
+      {
+        to: this.getPaymentContract(),
+        functionData: new FunctionData(
+          FunctionSelector.fromSignature('fee_entrypoint_public(Field,(Field),Field)'),
+          false,
+          true,
+          false,
+        ),
+        args: [maxFee, this.asset, nonce],
+      },
+      // and trying to take a little extra in teardown, but specify a bad nonce
+      {
+        to: this.asset,
+        functionData: new FunctionData(
+          FunctionSelector.fromSignature('transfer_public((Field),(Field),Field,Field)'),
+          false,
+          false,
+          false,
+        ),
+        args: [this.wallet.getAddress(), this.paymentContract, new Fr(1), Fr.random()],
+      },
+    ]);
+  }
+}
diff --git a/yarn-project/sequencer-client/src/simulator/world_state_public_db.test.ts b/yarn-project/sequencer-client/src/simulator/world_state_public_db.test.ts
index b8992cdef70..d33e8a06d56 100644
--- a/yarn-project/sequencer-client/src/simulator/world_state_public_db.test.ts
+++ b/yarn-project/sequencer-client/src/simulator/world_state_public_db.test.ts
@@ -85,7 +85,7 @@ describe('world_state_public_db', () => {
     // write a new value to our first value
     await publicStateDb.storageWrite(addresses[0], slots[0], newValue);
 
-    // should read back the uncommited value
+    // should read back the uncommitted value
     expect(await publicStateDb.storageRead(addresses[0], slots[0])).toEqual(newValue);
 
     // other slots should be unchanged
@@ -132,7 +132,7 @@ describe('world_state_public_db', () => {
     expect(await publicStateDb.storageRead(addresses[0], slots[0])).toEqual(newValue);
   });
 
-  it('reads original value if rolled back uncommited value', async function () {
+  it('reads original value if rolled back uncommitted value', async function () {
     const publicStateDb = new WorldStatePublicDB(db);
     expect(await publicStateDb.storageRead(addresses[0], slots[0])).toEqual(dbValues[0]);
 
@@ -141,7 +141,7 @@ describe('world_state_public_db', () => {
     // write a new value to our first value
     await publicStateDb.storageWrite(addresses[0], slots[0], newValue);
 
-    // should read back the uncommited value
+    // should read back the uncommitted value
     expect(await publicStateDb.storageRead(addresses[0], slots[0])).toEqual(newValue);
 
     // now rollback
@@ -174,7 +174,7 @@ describe('world_state_public_db', () => {
     // write a new value to our first value
     await publicStateDb.storageWrite(addresses[0], slots[0], newValue2);
 
-    // should read back the uncommited value
+    // should read back the uncommitted value
     expect(await publicStateDb.storageRead(addresses[0], slots[0])).toEqual(newValue2);
   });