diff --git a/codex/contracts/requests.nim b/codex/contracts/requests.nim
index 482c5161..5d5a7780 100644
--- a/codex/contracts/requests.nim
+++ b/codex/contracts/requests.nim
@@ -54,6 +54,7 @@ type
     Finished
     Failed
     Paid
+    Cancelled
 
 proc `==`*(x, y: Nonce): bool {.borrow.}
 proc `==`*(x, y: RequestId): bool {.borrow.}
diff --git a/codex/purchasing/states/cancelled.nim b/codex/purchasing/states/cancelled.nim
index aedca207..e3db9844 100644
--- a/codex/purchasing/states/cancelled.nim
+++ b/codex/purchasing/states/cancelled.nim
@@ -22,4 +22,4 @@ method run*(state: PurchaseCancelled, machine: Machine): Future[?State] {.async.
   await purchase.market.withdrawFunds(purchase.requestId)
 
   let error = newException(Timeout, "Purchase cancelled due to timeout")
-  return some State(PurchaseErrored(error: error))
+  purchase.future.fail(error)
diff --git a/codex/purchasing/states/submitted.nim b/codex/purchasing/states/submitted.nim
index 53c36864..41869430 100644
--- a/codex/purchasing/states/submitted.nim
+++ b/codex/purchasing/states/submitted.nim
@@ -33,7 +33,7 @@ method run*(state: PurchaseSubmitted, machine: Machine): Future[?State] {.async.
     await subscription.unsubscribe()
 
   proc withTimeout(future: Future[void]) {.async.} =
-    let expiry = request.expiry.truncate(int64)
+    let expiry = request.expiry.truncate(int64) + 1
     await future.withTimeout(clock, expiry)
 
   try:
diff --git a/codex/sales/salesagent.nim b/codex/sales/salesagent.nim
index 97cf1387..3db520b4 100644
--- a/codex/sales/salesagent.nim
+++ b/codex/sales/salesagent.nim
@@ -54,6 +54,11 @@ proc retrieveRequest*(agent: SalesAgent) {.async.} =
   if data.request.isNone:
     data.request = await market.getRequest(data.requestId)
 
+proc retrieveRequestState*(agent: SalesAgent): Future[?RequestState] {.async.} =
+  let data = agent.data
+  let market = agent.context.market
+  return await market.requestState(data.requestId)
+
 proc subscribeCancellation(agent: SalesAgent) {.async.} =
   let data = agent.data
   let clock = agent.context.clock
@@ -62,8 +67,20 @@ proc subscribeCancellation(agent: SalesAgent) {.async.} =
     without request =? data.request:
       return
 
-    await clock.waitUntil(request.expiry.truncate(int64))
-    agent.schedule(cancelledEvent(request))
+    while true:
+      let deadline = max(clock.now, request.expiry.truncate(int64)) + 1
+      trace "Waiting for request to be cancelled", now=clock.now, expiry=deadline
+      await clock.waitUntil(deadline)
+
+      without state =? await agent.retrieveRequestState():
+        error "Uknown request", requestId = data.requestId
+        return
+
+      if state == RequestState.Cancelled:
+        agent.schedule(cancelledEvent(request))
+        break
+
+      debug "The request is not yet canceled, even though it should be. Waiting for some more time.", currentState = state, now=clock.now
 
   data.cancelled = onCancelled()
 
diff --git a/codex/sales/states/cancelled.nim b/codex/sales/states/cancelled.nim
index 0e7e5259..54b8e553 100644
--- a/codex/sales/states/cancelled.nim
+++ b/codex/sales/states/cancelled.nim
@@ -1,4 +1,5 @@
 import pkg/chronicles
+import ../salesagent
 import ../statemachine
 import ./errorhandling
 import ./errored
@@ -8,11 +9,30 @@ logScope:
 
 type
   SaleCancelled* = ref object of ErrorHandlingState
-  SaleCancelledError* = object of CatchableError
-  SaleTimeoutError* = object of SaleCancelledError
 
 method `$`*(state: SaleCancelled): string = "SaleCancelled"
 
 method run*(state: SaleCancelled, machine: Machine): Future[?State] {.async.} =
-  let error = newException(SaleTimeoutError, "Sale cancelled due to timeout")
-  return some State(SaleErrored(error: error))
+  let agent = SalesAgent(machine)
+  let data = agent.data
+  let market = agent.context.market
+
+  without request =? data.request:
+    raiseAssert "no sale request"
+
+  without slotIndex =? data.slotIndex:
+    raiseAssert("no slot index assigned")
+
+  let slot = Slot(request: request, slotIndex: slotIndex)
+  debug "Collecting collateral and partial payout",  requestId = $data.requestId, slotIndex
+  await market.freeSlot(slot.id)
+
+  if onClear =? agent.context.onClear and
+      request =? data.request and
+      slotIndex =? data.slotIndex:
+    onClear(request, slotIndex)
+
+  if onCleanUp =? agent.onCleanUp:
+    await onCleanUp()
+
+  warn "Sale cancelled due to timeout",  requestId = $data.requestId, slotIndex
diff --git a/codex/sales/states/failed.nim b/codex/sales/states/failed.nim
index aced9c56..461beb13 100644
--- a/codex/sales/states/failed.nim
+++ b/codex/sales/states/failed.nim
@@ -1,4 +1,5 @@
 import pkg/chronicles
+import ../salesagent
 import ../statemachine
 import ./errorhandling
 import ./errored
@@ -13,5 +14,18 @@ type
 method `$`*(state: SaleFailed): string = "SaleFailed"
 
 method run*(state: SaleFailed, machine: Machine): Future[?State] {.async.} =
+  let data = SalesAgent(machine).data
+  let market = SalesAgent(machine).context.market
+
+  without request =? data.request:
+    raiseAssert "no sale request"
+
+  without slotIndex =? data.slotIndex:
+    raiseAssert("no slot index assigned")
+
+  let slot = Slot(request: request, slotIndex: slotIndex)
+  debug "Removing slot from mySlots",  requestId = $data.requestId, slotIndex
+  await market.freeSlot(slot.id)
+
   let error = newException(SaleFailedError, "Sale failed")
   return some State(SaleErrored(error: error))
diff --git a/codex/sales/states/unknown.nim b/codex/sales/states/unknown.nim
index ed0a96b3..0cd5684d 100644
--- a/codex/sales/states/unknown.nim
+++ b/codex/sales/states/unknown.nim
@@ -54,3 +54,5 @@ method run*(state: SaleUnknown, machine: Machine): Future[?State] {.async.} =
     return some State(SaleFinished())
   of SlotState.Failed:
     return some State(SaleFailed())
+  of SlotState.Cancelled:
+    return some State(SaleCancelled())
diff --git a/tests/codex/sales/testsales.nim b/tests/codex/sales/testsales.nim
index dd7a6345..9827a357 100644
--- a/tests/codex/sales/testsales.nim
+++ b/tests/codex/sales/testsales.nim
@@ -453,10 +453,35 @@ asyncchecksuite "Sales":
       return success()
     createAvailability()
     await market.requestStorage(request)
-    clock.set(request.expiry.truncate(int64))
+
+    # If we would not await, then the `clock.set` would run "too fast" as the `subscribeCancellation()`
+    # would otherwise not set the timeout early enough as it uses `clock.now` in the deadline calculation.
+    await sleepAsync(chronos.milliseconds(100))
+    market.requestState[request.id]=RequestState.Cancelled
+    clock.set(request.expiry.truncate(int64)+1)
     check eventually (await reservations.all(Availability)).get == @[availability]
     check getAvailability().size == origSize
 
+  test "verifies that request is indeed expired from onchain before firing onCancelled":
+    let origSize = availability.size
+    sales.onStore = proc(request: StorageRequest,
+                         slot: UInt256,
+                         onBatch: BatchProc): Future[?!void] {.async.} =
+      await sleepAsync(chronos.hours(1))
+      return success()
+    createAvailability()
+    await market.requestStorage(request)
+    market.requestState[request.id]=RequestState.New # "On-chain" is the request still ongoing even after local expiration
+
+    # If we would not await, then the `clock.set` would run "too fast" as the `subscribeCancellation()`
+    # would otherwise not set the timeout early enough as it uses `clock.now` in the deadline calculation.
+    await sleepAsync(chronos.milliseconds(100))
+    clock.set(request.expiry.truncate(int64)+1)
+    check getAvailability().size == 0
+
+    market.requestState[request.id]=RequestState.Cancelled # Now "on-chain" is also expired
+    check eventually getAvailability().size == origSize
+
   test "loads active slots from market":
     let me = await market.getSigner()
 
diff --git a/tests/codex/testpurchasing.nim b/tests/codex/testpurchasing.nim
index 719b0326..3efe92c4 100644
--- a/tests/codex/testpurchasing.nim
+++ b/tests/codex/testpurchasing.nim
@@ -105,7 +105,7 @@ asyncchecksuite "Purchasing":
     let purchase = await purchasing.purchase(request)
     check eventually market.requested.len > 0
     let request = market.requested[0]
-    clock.set(request.expiry.truncate(int64))
+    clock.set(request.expiry.truncate(int64) + 1)
     expect PurchaseTimeout:
       await purchase.wait()
 
@@ -113,7 +113,7 @@ asyncchecksuite "Purchasing":
     let purchase = await purchasing.purchase(request)
     check eventually market.requested.len > 0
     let request = market.requested[0]
-    clock.set(request.expiry.truncate(int64))
+    clock.set(request.expiry.truncate(int64) + 1)
     expect PurchaseTimeout:
       await purchase.wait()
     check market.withdrawn == @[request.id]
diff --git a/tests/examples.nim b/tests/examples.nim
index a3171f27..1f2a4466 100644
--- a/tests/examples.nim
+++ b/tests/examples.nim
@@ -1,4 +1,5 @@
 import std/random
+import std/strutils
 import std/sequtils
 import std/times
 import std/typetraits
@@ -6,6 +7,12 @@ import pkg/codex/contracts/requests
 import pkg/codex/sales/slotqueue
 import pkg/stint
 
+proc exampleString*(length: int): string =
+  let chars = "abcdefghijklmnopqrstuvwxyzABCDEFGHIJKLMNOPQRSTUVWXYZ0123456789"
+  result = newString(length) # Create a new empty string with a given length
+  for i in 0..<length:
+    result[i] = chars[rand(chars.len-1)] # Generate a random index and set the string's character
+
 proc example*[T: SomeInteger](_: type T): T =
   rand(T)
 
diff --git a/tests/integration/codexclient.nim b/tests/integration/codexclient.nim
index 99825dd7..fa6f17c5 100644
--- a/tests/integration/codexclient.nim
+++ b/tests/integration/codexclient.nim
@@ -64,10 +64,11 @@ proc getPurchase*(client: CodexClient, purchaseId: PurchaseId): ?!RestPurchase =
   let json = ? parseJson(body).catch
   RestPurchase.fromJson(json)
 
-proc getSlots*(client: CodexClient): JsonNode =
+proc getSlots*(client: CodexClient): ?!seq[Slot] =
   let url = client.baseurl & "/sales/slots"
   let body = client.http.getContent(url)
-  parseJson(body).catch |? nil
+  let json = ? parseJson(body).catch
+  seq[Slot].fromJson(json)
 
 proc postAvailability*(
     client: CodexClient,
diff --git a/tests/integration/testIntegration.nim b/tests/integration/testIntegration.nim
index 6deef0a8..5bdc0d1f 100644
--- a/tests/integration/testIntegration.nim
+++ b/tests/integration/testIntegration.nim
@@ -1,4 +1,5 @@
 import std/options
+import std/sequtils
 from pkg/libp2p import `==`
 import pkg/chronos
 import pkg/stint
@@ -10,6 +11,7 @@ import pkg/codex/utils/stintutils
 import ../contracts/time
 import ../contracts/deployment
 import ../codex/helpers
+import ../examples
 import ./twonodes
 
 
@@ -164,3 +166,30 @@ twonodessuite "Integration tests", debug1 = false, debug2 = false:
     await provider.advanceTime(duration)
 
     check eventually (await token.balanceOf(account2)) - startBalance == duration*reward
+
+  test "expired request partially pays out for stored time":
+    let marketplace = Marketplace.new(Marketplace.address, provider.getSigner())
+    let tokenAddress = await marketplace.token()
+    let token = Erc20Token.new(tokenAddress, provider.getSigner())
+    let reward = 400.u256
+    let duration = 100.u256
+
+    # client 2 makes storage available
+    let startBalanceClient2 = await token.balanceOf(account2)
+    discard client2.postAvailability(size=140000.u256, duration=200.u256, minPrice=300.u256, maxCollateral=300.u256).get
+
+    # client 1 requests storage but requires two nodes to host the content
+    let startBalanceClient1 = await token.balanceOf(account1)
+    let expiry = (await provider.currentTime()) + 10
+    let cid = client1.upload(exampleString(100000)).get
+    let id = client1.requestStorage(cid, duration=duration, reward=reward, proofProbability=3.u256, expiry=expiry, collateral=200.u256, nodes=2).get
+
+    # We have to wait for Client 2 fills the slot, before advancing time.
+    # Until https://github.com/codex-storage/nim-codex/issues/594 is implemented nothing better then
+    # sleeping some seconds is available.
+    await sleepAsync(2.seconds)
+    await provider.advanceTimeTo(expiry+1)
+    check eventually(client1.purchaseStateIs(id, "cancelled"), 20000)
+
+    check eventually ((await token.balanceOf(account2)) - startBalanceClient2) > 0 and ((await token.balanceOf(account2)) - startBalanceClient2) < 10*reward
+    check eventually (startBalanceClient1 - (await token.balanceOf(account1))) == ((await token.balanceOf(account2)) - startBalanceClient2)
diff --git a/vendor/codex-contracts-eth b/vendor/codex-contracts-eth
index 1854dfba..14e453ac 160000
--- a/vendor/codex-contracts-eth
+++ b/vendor/codex-contracts-eth
@@ -1 +1 @@
-Subproject commit 1854dfba9991a25532de5f6a53cf50e66afb3c8b
+Subproject commit 14e453ac3150e6c9ca277e605d5df9389ac7eea7