diff --git a/substrate/srml/contract/src/double_map.rs b/substrate/srml/contract/src/double_map.rs
index 6867d2a5c6..c79fc7fe2c 100644
--- a/substrate/srml/contract/src/double_map.rs
+++ b/substrate/srml/contract/src/double_map.rs
@@ -83,6 +83,11 @@ pub trait StorageDoubleMap {
 		unhashed::get(&full_key::<Self>(k1, k2)[..])
 	}
 
+	/// Returns `true` if value under the specified keys exists.
+	fn exists(k1: Self::Key1, k2: Self::Key2) -> bool {
+		unhashed::exists(&full_key::<Self>(k1, k2)[..])
+	}
+
 	/// Removes all entries that shares the `k1` as the first key.
 	fn remove_prefix(k1: Self::Key1) {
 		unhashed::kill_prefix(&first_part_of_key::<Self>(k1))
diff --git a/substrate/srml/contract/src/exec.rs b/substrate/srml/contract/src/exec.rs
index 79b6e0eee3..7830a95a79 100644
--- a/substrate/srml/contract/src/exec.rs
+++ b/substrate/srml/contract/src/exec.rs
@@ -185,9 +185,13 @@ impl<'a, T: Trait> ExecutionContext<'a, T> {
 /// (transfering endowment), specified by `contract_create` flag,
 /// or because of a transfer via `call`.
 ///
-/// Note, that the fee is denominated in `T::Balance` units, but
+/// NOTE: that the fee is denominated in `T::Balance` units, but
 /// charged in `T::Gas` from the provided `gas_meter`. This means
 /// that the actual amount charged might differ.
+///
+/// NOTE: that we allow for draining all funds of the contract so it
+/// can go below existential deposit, essentially giving a contract
+/// the chance to give up it's life.
 fn transfer<'a, T: Trait>(
 	gas_meter: &mut GasMeter<T>,
 	contract_create: bool,
@@ -212,6 +216,7 @@ fn transfer<'a, T: Trait>(
 		return Err("not enough gas to pay transfer fee");
 	}
 
+	// We allow balance to go below the existential deposit here:
 	let from_balance = ctx.overlay.get_balance(transactor);
 	let new_from_balance = match from_balance.checked_sub(&value) {
 		Some(b) => b,
diff --git a/substrate/srml/contract/src/tests.rs b/substrate/srml/contract/src/tests.rs
index c60d3dd9bf..6bbb6cd11e 100644
--- a/substrate/srml/contract/src/tests.rs
+++ b/substrate/srml/contract/src/tests.rs
@@ -241,6 +241,40 @@ fn contract_transfer() {
 	});
 }
 
+#[test]
+fn contract_transfer_to_death() {
+	const CONTRACT_SHOULD_TRANSFER_VALUE: u64 = 6;
+
+	let code_transfer = wabt::wat2wasm(CODE_TRANSFER).unwrap();
+
+	with_externalities(&mut ExtBuilder::default().existential_deposit(5).build(), || {
+		<CodeOf<Test>>::insert(1, code_transfer.to_vec());
+
+		Balances::set_free_balance(&0, 100_000_000);
+		Balances::increase_total_stake_by(100_000_000);
+
+		Balances::set_free_balance(&1, 6);
+		Balances::increase_total_stake_by(6);
+		<StorageOf<Test>>::insert(1, b"foo".to_vec(), b"1".to_vec());
+
+		assert_ok!(Contract::call(Origin::signed(0), 1, 0, 100_000, Vec::new()));
+
+		assert_eq!(
+			Balances::free_balance(&0),
+			// 2 * 10 - gas used by the contract (10) multiplied by gas price (2)
+			// 2 * 135 - base gas fee for call (by transaction)
+			// 2 * 135 - base gas fee for call (by the contract)
+			100_000_000 - (2 * 10) - (2 * 135) - (2 * 135),
+		);
+
+		assert!(!<CodeOf<Test>>::exists(1));
+		assert!(!<StorageOf<Test>>::exists(1, b"foo".to_vec()));
+		assert_eq!(Balances::free_balance(&1), 0);
+
+		assert_eq!(Balances::free_balance(&9), CONTRACT_SHOULD_TRANSFER_VALUE);
+	});
+}
+
 #[test]
 fn contract_transfer_takes_creation_fee() {
 	const CONTRACT_SHOULD_TRANSFER_VALUE: u64 = 6;