diff --git a/bin/embark b/bin/embark
index d70fefaaa..0eb7c3a3d 100644
--- a/bin/embark
+++ b/bin/embark
@@ -13,7 +13,7 @@ var run = function(cmd) {
 }
 
 program
-  .version('0.4.3')
+  .version('0.5.0')
 
 program.command('new [name]').description('New application').action(function(name) {
   if (name === undefined) {
diff --git a/lib/config/config.js b/lib/config/config.js
index 04d192fbf..3dfc3d64e 100644
--- a/lib/config/config.js
+++ b/lib/config/config.js
@@ -1,9 +1,11 @@
 var readYaml = require('read-yaml');
 
 BlockchainConfig = require('./blockchain.js');
+ContractsConfig = require('./contracts.js');
 
 Config = {
-  Blockchain: BlockchainConfig
+  Blockchain: BlockchainConfig,
+  Contracts: ContractsConfig
 }
 
 module.exports = Config
diff --git a/lib/config/contracts.js b/lib/config/contracts.js
new file mode 100644
index 000000000..d18619625
--- /dev/null
+++ b/lib/config/contracts.js
@@ -0,0 +1,59 @@
+var readYaml = require('read-yaml');
+var fs = require('fs');
+var Blockchain = require('./blockchain.js');
+
+ContractsConfig = function(files, blockchainConfig, web3) {
+  this.all_contracts = [];
+  this.contractDB = {};
+  this.contractFiles = files;
+  this.web3 = web3;
+
+  try {
+    this.web3.setProvider(new this.web3.providers.HttpProvider("http://" + blockchainConfig.rpcHost + ":" + blockchainConfig.rpcPort));
+    primaryAddress = this.web3.eth.coinbase;
+    this.web3.eth.defaultAccount = primaryAddress;
+  } catch (_error) {
+    e = _error;
+    throw new Error("can't connect to " + blockchainConfig.rpcHost + ":" + blockchainConfig.rpcPort + " check if an ethereum node is running");
+  }
+
+  console.log("address is : " + primaryAddress);
+};
+
+ContractsConfig.prototype.loadConfigFile = function(filename) {
+  try {
+    this.contractConfig = readYaml.sync(filename);
+  } catch (e) {
+    throw new Error("error reading " + filename);
+  }
+  return this;
+}
+
+ContractsConfig.prototype.loadConfig = function(config) {
+  this.contractConfig = config;
+  return this;
+}
+
+ContractsConfig.prototype.config = function(env) {
+  return this.contractConfig[env];
+}
+
+ContractsConfig.prototype.compileContracts = function() {
+  var contractFile, source, j;
+
+  for (j = 0; j < this.contractFiles.length; j++) {
+    contractFile = this.contractFiles[j];
+    source = fs.readFileSync(contractFile).toString()
+
+    console.log("compiling " + contractFile);
+    compiled_contracts = this.web3.eth.compile.solidity(source);
+    for (className in compiled_contracts) {
+      var contract = compiled_contracts[className];
+      this.all_contracts.push(className);
+      this.contractDB[className] = contract;
+    }
+  }
+}
+
+module.exports = ContractsConfig
+
diff --git a/lib/deploy.js b/lib/deploy.js
index a4d4f5fad..c4e7784b3 100644
--- a/lib/deploy.js
+++ b/lib/deploy.js
@@ -9,7 +9,8 @@ deployContracts = function(env, contractFiles, destFile) {
 
   blockchainConfig = (new Config.Blockchain()).loadConfigFile('config/blockchain.yml').config(env);
 
-  contractsConfig = readYaml.sync("config/contracts.yml")[env || "development"];
+  contractsManager = (new Config.Contracts(contractFiles,  blockchainConfig)).loadConfigFile('config/contracts.yml');
+  contractsConfig = contractsManager.config(env);
 
   try {
     web3.setProvider(new web3.providers.HttpProvider("http://" + blockchainConfig.rpcHost + ":" + blockchainConfig.rpcPort));
@@ -48,22 +49,9 @@ deployContracts = function(env, contractFiles, destFile) {
     }
   }
 
-  all_contracts = [];
-
-  contractDB = {};
-
-  for (j = 0, len1 = contractFiles.length; j < len1; j++) {
-    contractFile = contractFiles[j];
-    //source = grunt.file.read(contractFile);
-    source = fs.readFileSync(contractFile).toString()
-    console.log("deploying " + contractFile);
-    compiled_contracts = web3.eth.compile.solidity(source);
-    for (className in compiled_contracts) {
-      contract = compiled_contracts[className];
-      all_contracts.push(className);
-      contractDB[className] = contract;
-    }
-  }
+  contractsManager.compileContracts();
+  all_contracts = contractsManager.all_contracts;
+  contractDB = contractsManager.contractDB;
 
   all_contracts.sort((function(_this) {
     return function(a, b) {
diff --git a/lib/test.js b/lib/test.js
index 2f7a44099..ee735936a 100644
--- a/lib/test.js
+++ b/lib/test.js
@@ -18,8 +18,8 @@ TestContractWrapper = (function() {
   }
 
   TestContractWrapper.prototype.initializeContract = function() {
-    example_abi = JSON.stringify(contract.info.abiDefinition)
-    example_binary = contract.code.slice(2)
+    example_abi = JSON.stringify(this.contract.info.abiDefinition)
+    example_binary = this.contract.code.slice(2)
 
     py_exec("example_abi = '" + example_abi + "'")
     py_exec("example_abi")
@@ -67,19 +67,11 @@ request = function(className, args) {
 
   //TODO: get the files from the config
   contractFiles = grunt.file.expand("./app/contracts/**/*.sol")
-  contractDB = {}
+  blockchainConfig = (new Config.Blockchain()).loadConfigFile('config/blockchain.yml').config(env);
+  contractsConfig = new Config.Contracts(contractFiles, blockchainConfig);
 
-  var i;
-  for (i = 0, len = contractFiles.length; i < len; i++) {
-    var contractFile = contractFiles[i];
-    var source = fs.readFileSync(contractFile).toString()
-
-    compiled_contracts = web3.eth.compile.solidity(source)
-    for (className in compiled_contracts) {
-      var contract = compiled_contracts[className];
-      contractDB[className] = contract;
-    }
-  }
+  contractsConfig.compileContracts();
+  contractDB = contractsConfig.contractDB;
 
   var contract = contractDB[className];
   return TestContract(contract, className, args)
diff --git a/package.json b/package.json
index f5c758b09..256051ffe 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "embark-framework",
-  "version": "0.4.3",
+  "version": "0.5.0",
   "description": "",
   "scripts": {
     "test": "echo \"Error: no test specified\" && exit 1"
@@ -41,6 +41,8 @@
   "license": "ISC",
   "devDependencies": {
     "grunt-mocha-test": "^0.12.7",
-    "mocha": "^2.2.5"
+    "mocha": "^2.2.5",
+    "mocha-sinon": "^1.1.4",
+    "sinon": "^1.15.4"
   }
 }
diff --git a/test/config.contracts.js b/test/config.contracts.js
new file mode 100644
index 000000000..a8c6fa522
--- /dev/null
+++ b/test/config.contracts.js
@@ -0,0 +1,61 @@
+var Config = require('../lib/config/config.js');
+var assert = require('assert');
+var sinon = require('sinon');
+var web3 = require('web3');
+require('mocha-sinon');
+
+describe('embark.config.contracts', function() {
+  var blockchainConfig = (new Config.Blockchain()).loadConfigFile('test/support/blockchain.yml').config("development");
+  //sinon.stub(web3, "setProvider");
+  //sinon.stub(web3.eth.compile, "solidity", function() {
+  //  return "compiled_code";
+  //});
+
+  describe('#loadConfigFile', function() {
+    it('should read and load yml file', function() {
+      var contractsConfig = new Config.Contracts([], blockchainConfig, web3);
+      contractsConfig.loadConfigFile('test/support/contracts.yml');
+
+      assert.equal(contractsConfig.contractConfig.hasOwnProperty('development'), true)
+      assert.equal(contractsConfig.contractConfig.hasOwnProperty('staging'), true)
+    });
+
+    it('should throw exception reading invalid file', function() {
+      assert.throws(function() { contractsConfig.loadConfigFile('test/support/invalid.yml') }, Error);
+    });
+  });
+
+  describe('#loadConfig', function() {
+    it('should load config', function() {
+      var contractsConfig = new Config.Contracts([], blockchainConfig, web3);
+      var hsh = {
+        development: {},
+        staging: {}
+      };
+
+      contractsConfig.loadConfig(hsh);
+
+      assert.equal(contractsConfig.contractConfig.hasOwnProperty('development'), true)
+      assert.equal(contractsConfig.contractConfig.hasOwnProperty('staging'), true)
+    });
+  });
+
+  describe('#compileContracts', function() {
+    context("simple contracts", function() {
+      before(function() {
+        files = [
+          'test/support/contracts/simple_storage.sol',
+          'test/support/contracts/another_storage.sol'
+        ]
+        contractsConfig = new Config.Contracts(files, blockchainConfig, web3);
+        contractsConfig.loadConfigFile('test/support/contracts.yml');
+        contractsConfig.compileContracts();
+      });
+
+      it('add contracts to a list', function() {
+        assert.deepEqual(contractsConfig.all_contracts, [ "SimpleStorage", "AnotherStorage" ]);
+      });
+    });
+  });
+});
+
diff --git a/test/support/contracts.yml b/test/support/contracts.yml
new file mode 100644
index 000000000..56addd58b
--- /dev/null
+++ b/test/support/contracts.yml
@@ -0,0 +1,2 @@
+development:
+staging:
diff --git a/test/support/contracts/another_storage.sol b/test/support/contracts/another_storage.sol
new file mode 100644
index 000000000..ce3c0ac6b
--- /dev/null
+++ b/test/support/contracts/another_storage.sol
@@ -0,0 +1,14 @@
+contract AnotherStorage {
+  uint public storedData;
+
+  function SimpleStorage(uint initialValue) {
+    storedData = initialValue;
+  }
+
+  function set(uint x) {
+    storedData = x;
+  }
+  function get() constant returns (uint retVal) {
+    return storedData;
+  }
+}
diff --git a/test/support/contracts/simple_storage.sol b/test/support/contracts/simple_storage.sol
new file mode 100644
index 000000000..0b12e43db
--- /dev/null
+++ b/test/support/contracts/simple_storage.sol
@@ -0,0 +1,14 @@
+contract SimpleStorage {
+  uint public storedData;
+
+  function SimpleStorage(uint initialValue) {
+    storedData = initialValue;
+  }
+
+  function set(uint x) {
+    storedData = x;
+  }
+  function get() constant returns (uint retVal) {
+    return storedData;
+  }
+}