diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/ConstraintSystemBuilderImpl.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/ConstraintSystemBuilderImpl.kt
index 8a4191125b8..cde75ecbd9e 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/ConstraintSystemBuilderImpl.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/ConstraintSystemBuilderImpl.kt
@@ -37,7 +37,12 @@ import org.jetbrains.kotlin.types.typeUtil.defaultProjections
 import org.jetbrains.kotlin.types.typeUtil.isDefaultBound
 import java.util.*
 
-class ConstraintSystemBuilderImpl : ConstraintSystem.Builder {
+class ConstraintSystemBuilderImpl(private val mode: Mode = ConstraintSystemBuilderImpl.Mode.INFERENCE) : ConstraintSystem.Builder {
+    enum class Mode {
+        INFERENCE,
+        SPECIFICITY
+    }
+
     internal data class Constraint(
             val kind: ConstraintKind, val subtype: KotlinType, val superType: KotlinType, val position: ConstraintPosition
     )
@@ -217,15 +222,13 @@ class ConstraintSystemBuilderImpl : ConstraintSystem.Builder {
                 generateTypeParameterBound(superType, subType, constraintKind.bound.reverse(), constraintContext)
                 return
             }
-            // if subType is nullable and superType is not nullable, unsafe call or type mismatch error will be generated later,
-            // but constraint system should be solved anyway
-            val subTypeNotNullable = if (constraintContext.initial) TypeUtils.makeNotNullable(subType) else subType
-            val superTypeNotNullable = if (constraintContext.initial) TypeUtils.makeNotNullable(superType) else superType
+            val subType2 = simplifyType(subType, constraintContext.initial)
+            val superType2 = simplifyType(superType, constraintContext.initial)
             val result = if (constraintKind == EQUAL) {
-                typeCheckingProcedure.equalTypes(subTypeNotNullable, superTypeNotNullable)
+                typeCheckingProcedure.equalTypes(subType2, superType2)
             }
             else {
-                typeCheckingProcedure.isSubtypeOf(subTypeNotNullable, superType)
+                typeCheckingProcedure.isSubtypeOf(subType2, superType)
             }
             if (!result) errors.add(newTypeInferenceOrParameterConstraintError(constraintPosition))
         }
@@ -237,6 +240,15 @@ class ConstraintSystemBuilderImpl : ConstraintSystem.Builder {
         simplifyConstraint(newSubType, superType)
     }
 
+    private fun simplifyType(type: KotlinType, isInitialConstraint: Boolean): KotlinType =
+            if (mode == Mode.SPECIFICITY || !isInitialConstraint)
+                type
+            else {
+                // if subType is nullable and superType is not nullable, unsafe call or type mismatch error will be generated later,
+                // but constraint system should be solved anyway
+                TypeUtils.makeNotNullable(type)
+            }
+
     internal fun addBound(
             typeVariable: TypeVariable,
             constrainingType: KotlinType,
@@ -393,6 +405,10 @@ class ConstraintSystemBuilderImpl : ConstraintSystem.Builder {
     override fun build(): ConstraintSystem {
         return ConstraintSystemImpl(allTypeParameterBounds, usedInBounds, errors, initialConstraints, typeVariableSubstitutors)
     }
+
+    companion object {
+        fun forSpecificity() = ConstraintSystemBuilderImpl(Mode.SPECIFICITY)
+    }
 }
 
 internal fun createTypeForFunctionPlaceholder(
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignatureSpecificity.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignatureSpecificity.kt
index 06cba25d2c4..0d0d55ac8e8 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignatureSpecificity.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/results/FlatSignatureSpecificity.kt
@@ -37,7 +37,7 @@ fun <T> isSignatureNotLessSpecific(
     if (specific.valueParameterTypes.size != general.valueParameterTypes.size) return false
 
     val typeParameters = general.typeParameters
-    val constraintSystemBuilder: ConstraintSystem.Builder = ConstraintSystemBuilderImpl()
+    val constraintSystemBuilder: ConstraintSystem.Builder = ConstraintSystemBuilderImpl.forSpecificity()
     val typeSubstitutor = constraintSystemBuilder.registerTypeVariables(callHandle, typeParameters)
 
     var numConstraints = 0
diff --git a/compiler/testData/diagnostics/tests/duplicateJvmSignature/vararg.kt b/compiler/testData/diagnostics/tests/duplicateJvmSignature/vararg.kt
index a0f9b68c76a..878fc256fa9 100644
--- a/compiler/testData/diagnostics/tests/duplicateJvmSignature/vararg.kt
+++ b/compiler/testData/diagnostics/tests/duplicateJvmSignature/vararg.kt
@@ -5,4 +5,4 @@
 <!CONFLICTING_JVM_DECLARATIONS!>fun foo(<!UNUSED_PARAMETER!>x<!>: Array<Int>)<!> {}
 
 <!CONFLICTING_JVM_DECLARATIONS!>fun foo(vararg <!UNUSED_PARAMETER!>nn<!>: Number)<!> {}
-<!CONFLICTING_JVM_DECLARATIONS!>fun foo(<!UNUSED_PARAMETER!>nn<!>: Array<out Number>)<!> {}
\ No newline at end of file
+<!CONFLICTING_JVM_DECLARATIONS!>fun foo(<!UNUSED_PARAMETER!>nn<!>: Array<out Number>)<!> {}
diff --git a/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.kt b/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.kt
index 51607a90819..f7ac21f1f61 100644
--- a/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.kt
+++ b/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.kt
@@ -1,5 +1,10 @@
-fun <T> List<T>?.foo() {}
+fun <T1> List<T1>?.foo() {}
 
-// NB Not a redeclaration
-@JvmName("f1")
-fun <T> List<T>.foo() {}
+@JvmName("foo1")
+fun <T2> List<T2>.foo() {}
+
+
+fun <T1> bar(x: List<T1>) = x
+
+@JvmName("bar1")
+fun <T2> bar(x: List<T2>?) = x
diff --git a/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.txt b/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.txt
index adc1a34a6e2..df0ca52a828 100644
--- a/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.txt
+++ b/compiler/testData/diagnostics/testsWithStdLib/resolve/kt10732a.txt
@@ -1,4 +1,6 @@
 package
 
-@kotlin.jvm.JvmName(name = "f1") public fun </*0*/ T> kotlin.collections.List<T>.foo(): kotlin.Unit
-public fun </*0*/ T> kotlin.collections.List<T>?.foo(): kotlin.Unit
+public fun </*0*/ T1> bar(/*0*/ x: kotlin.collections.List<T1>): kotlin.collections.List<T1>
+@kotlin.jvm.JvmName(name = "bar1") public fun </*0*/ T2> bar(/*0*/ x: kotlin.collections.List<T2>?): kotlin.collections.List<T2>?
+public fun </*0*/ T1> kotlin.collections.List<T1>?.foo(): kotlin.Unit
+@kotlin.jvm.JvmName(name = "foo1") public fun </*0*/ T2> kotlin.collections.List<T2>.foo(): kotlin.Unit