diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java b/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java
index 6637d0bedec..9ab713325aa 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java
@@ -1429,7 +1429,7 @@ public class JetParsing extends AbstractJetParsing {
 
     /*
      * functionType
-     *   : "fun" (type ".")? functionTypeContents
+     *   : "fun" (type ".")? "(" (parameter | modifiers type){","} ")" (":" type)? // Unit by default
      *   ;
      */
     private void parseFunctionType() {
@@ -1446,22 +1446,15 @@ public class JetParsing extends AbstractJetParsing {
             advance(); // DOT
         }
 
-        parseFunctionTypeContents();
-
-        functionType.done(FUNCTION_TYPE);
-    }
-
-    /*
-     * functionTypeContents
-     *   : "(" (parameter | type){","} ")" ":" type
-     *   ;
-     */
-    private void parseFunctionTypeContents() {
         parseValueParameterList(true, TokenSet.EMPTY);
 
-        expect(COLON, "Expecting ':' followed by a return type", TYPE_REF_FIRST);
+        if (at(COLON)) {
+            advance(); // COLON // expect(COLON, "Expecting ':' followed by a return type", TYPE_REF_FIRST);
 
-        parseTypeRef();
+            parseTypeRef();
+        }
+
+        functionType.done(FUNCTION_TYPE);
     }
 
     /*
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/TypeResolver.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/TypeResolver.java
index 76c23ca970d..fd60a354043 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/TypeResolver.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/TypeResolver.java
@@ -105,12 +105,9 @@ public class TypeResolver {
                         }
                         else {
                             if (actualArgumentCount != expectedArgumentCount) {
-//                                String errorMessage = (expectedArgumentCount == 0 ? "No" : expectedArgumentCount) + " type arguments expected";
                                 if (actualArgumentCount == 0) {
-//                                    trace.getErrorHandler().genericError(type.getNode(), errorMessage);
                                     trace.report(WRONG_NUMBER_OF_TYPE_ARGUMENTS.on(type, expectedArgumentCount));
                                 } else {
-//                                    trace.getErrorHandler().genericError(type.getTypeArgumentList().getNode(), errorMessage);
                                     trace.report(WRONG_NUMBER_OF_TYPE_ARGUMENTS.on(type.getTypeArgumentList(), expectedArgumentCount));
                                 }
                             } else {
@@ -160,10 +157,14 @@ public class TypeResolver {
                     }
 
                     JetTypeReference returnTypeRef = type.getReturnTypeRef();
+                    JetType returnType;
                     if (returnTypeRef != null) {
-                        JetType returnType = resolveType(scope, returnTypeRef);
-                        result[0] = JetStandardClasses.getFunctionType(annotations, receiverType, parameterTypes, returnType);
+                        returnType = resolveType(scope, returnTypeRef);
                     }
+                    else {
+                        returnType = JetStandardClasses.getUnitType();
+                    }
+                    result[0] = JetStandardClasses.getFunctionType(annotations, receiverType, parameterTypes, returnType);
                 }
 
                 @Override
diff --git a/compiler/testData/checkerWithErrorTypes/quick/UnitByDefaultForFunctionTypes.jet b/compiler/testData/checkerWithErrorTypes/quick/UnitByDefaultForFunctionTypes.jet
new file mode 100644
index 00000000000..383e67e16c4
--- /dev/null
+++ b/compiler/testData/checkerWithErrorTypes/quick/UnitByDefaultForFunctionTypes.jet
@@ -0,0 +1,3 @@
+fun foo(f : fun()) {
+    val x : Unit = f()
+}
\ No newline at end of file
diff --git a/grammar/src/types.grm b/grammar/src/types.grm
index a0c3ce44679..b92457e67ce 100644
--- a/grammar/src/types.grm
+++ b/grammar/src/types.grm
@@ -47,11 +47,7 @@ optionalProjection
   ;
 
 functionType
-  : "fun" (type ".")? functionTypeContents
-  ;
-
-functionTypeContents
-  : "(" (parameter | modifiers /*lazy out ref*/ type){","} ")" ":" type
+  : "fun" (type ".")? "(" (parameter | modifiers /*lazy out ref*/ type){","} ")" (":" type)? // Unit by default
   ;
 
 tupleType