diff --git a/tests/fixtures/inspection/demo_poetry_package/pyproject.toml b/tests/fixtures/inspection/demo_poetry_package/pyproject.toml
new file mode 100644
index 00000000000..011338ea91a
--- /dev/null
+++ b/tests/fixtures/inspection/demo_poetry_package/pyproject.toml
@@ -0,0 +1,15 @@
+[tool.poetry]
+name = "demo-poetry"
+version = "0.1.0"
+description = ""
+authors = ["John Doe <john@example.com.com>"]
+
+[tool.poetry.dependencies]
+python = "^3.10"
+pendulum = "*"
+
+[tool.poetry.dev-dependencies]
+
+[build-system]
+requires = ["poetry-core>=1.0.0"]
+build-backend = "poetry.core.masonry.api"
diff --git a/tests/inspection/test_info.py b/tests/inspection/test_info.py
index c242fb90937..f9e1022ee62 100644
--- a/tests/inspection/test_info.py
+++ b/tests/inspection/test_info.py
@@ -131,6 +131,27 @@ def test_info_from_poetry_directory():
     demo_check_info(info)
 
 
+def test_info_from_poetry_directory_fallback_on_poetry_create_error(
+    mocker: MockerFixture,
+):
+    import poetry.inspection.info
+
+    mocker.patch(
+        "poetry.inspection.info.Factory.create_poetry", side_effect=RuntimeError
+    )
+    mock_get_poetry_package = mocker.spy(
+        poetry.inspection.info.PackageInfo, "_get_poetry_package"
+    )
+    mock_get_pep517_metadata = mocker.patch(
+        "poetry.inspection.info.get_pep517_metadata"
+    )
+
+    PackageInfo.from_directory(FIXTURE_DIR_INSPECTIONS / "demo_poetry_package")
+
+    assert mock_get_poetry_package.call_count == 1
+    assert mock_get_pep517_metadata.call_count == 1
+
+
 def test_info_from_requires_txt():
     info = PackageInfo.from_metadata(
         FIXTURE_DIR_INSPECTIONS / "demo_only_requires_txt.egg-info"
diff --git a/tests/installation/test_executor.py b/tests/installation/test_executor.py
index c7555bbd375..c9ec997edd0 100644
--- a/tests/installation/test_executor.py
+++ b/tests/installation/test_executor.py
@@ -618,3 +618,56 @@ def test_executor_should_be_initialized_with_correct_workers(
     executor = Executor(tmp_venv, pool, config, io)
 
     assert executor._max_workers == expected_workers
+
+
+def test_executer_fallback_on_poetry_create_error(
+    mocker: MockerFixture,
+    config: Config,
+    pool: Pool,
+    io: BufferedIO,
+    tmp_dir: str,
+    mock_file_downloads: None,
+    env: MockEnv,
+):
+    mock_pip_install = mocker.patch("poetry.installation.executor.pip_install")
+    mock_sdist_builder = mocker.patch("poetry.core.masonry.builders.sdist.SdistBuilder")
+    mock_editable_builder = mocker.patch(
+        "poetry.masonry.builders.editable.EditableBuilder"
+    )
+    mocker.patch("poetry.factory.Factory.create_poetry", side_effect=RuntimeError)
+
+    config.merge({"cache-dir": tmp_dir})
+
+    executor = Executor(env, pool, config, io)
+
+    directory_package = Package(
+        "simple-project",
+        "1.2.3",
+        source_type="directory",
+        source_url=Path(__file__)
+        .parent.parent.joinpath("fixtures/simple_project")
+        .resolve()
+        .as_posix(),
+    )
+
+    return_code = executor.execute(
+        [
+            Install(directory_package),
+        ]
+    )
+
+    expected = f"""
+Package operations: 1 install, 0 updates, 0 removals
+
+  • Installing simple-project (1.2.3 {directory_package.source_url})
+"""
+
+    expected = set(expected.splitlines())
+    output = set(io.fetch_output().splitlines())
+    assert output == expected
+    assert return_code == 0
+    assert mock_sdist_builder.call_count == 0
+    assert mock_editable_builder.call_count == 0
+    assert mock_pip_install.call_count == 1
+    assert mock_pip_install.call_args[1].get("upgrade") is True
+    assert mock_pip_install.call_args[1].get("editable") is False
diff --git a/tests/installation/test_pip_installer.py b/tests/installation/test_pip_installer.py
index 5d84fef22c9..1a732726087 100644
--- a/tests/installation/test_pip_installer.py
+++ b/tests/installation/test_pip_installer.py
@@ -234,3 +234,32 @@ def test_install_with_trusted_host(config: Config):
     assert "--trusted-host" in cmd
     cert_index = cmd.index("--trusted-host")
     assert cmd[cert_index + 1] == "foo.bar"
+
+
+def test_install_directory_fallback_on_poetry_create_error(
+    mocker: MockerFixture, tmp_venv: VirtualEnv, pool: Pool
+):
+    mocker.patch("poetry.factory.Factory.create_poetry", side_effect=RuntimeError)
+    mock_sdist_builder = mocker.patch("poetry.core.masonry.builders.sdist.SdistBuilder")
+    mock_editable_builder = mocker.patch(
+        "poetry.masonry.builders.editable.EditableBuilder"
+    )
+    mock_pip_install = mocker.patch("poetry.installation.pip_installer.pip_install")
+
+    package = Package(
+        "demo",
+        "1.0.0",
+        source_type="directory",
+        source_url=str(
+            Path(__file__).parent.parent / "fixtures/inspection/demo_poetry_package"
+        ),
+    )
+
+    installer = PipInstaller(tmp_venv, NullIO(), pool)
+    installer.install_directory(package)
+
+    assert mock_sdist_builder.call_count == 0
+    assert mock_editable_builder.call_count == 0
+    assert mock_pip_install.call_count == 1
+    assert mock_pip_install.call_args[1].get("deps") is False
+    assert mock_pip_install.call_args[1].get("upgrade") is True