diff --git a/compiler/frontend/src/org/jetbrains/kotlin/contracts/parsing/PsiContractParserDispatcher.kt b/compiler/frontend/src/org/jetbrains/kotlin/contracts/parsing/PsiContractParserDispatcher.kt
index f6ad47bb77a..21a51bc3c42 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/contracts/parsing/PsiContractParserDispatcher.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/contracts/parsing/PsiContractParserDispatcher.kt
@@ -35,10 +35,7 @@ import org.jetbrains.kotlin.contracts.parsing.effects.PsiReturnsEffectParser
 import org.jetbrains.kotlin.descriptors.ParameterDescriptor
 import org.jetbrains.kotlin.descriptors.ReceiverParameterDescriptor
 import org.jetbrains.kotlin.name.Name
-import org.jetbrains.kotlin.psi.KtBinaryExpression
-import org.jetbrains.kotlin.psi.KtCallExpression
-import org.jetbrains.kotlin.psi.KtExpression
-import org.jetbrains.kotlin.psi.KtLambdaExpression
+import org.jetbrains.kotlin.psi.*
 import org.jetbrains.kotlin.resolve.calls.callUtil.getResolvedCall
 import org.jetbrains.kotlin.resolve.calls.callUtil.getType
 import org.jetbrains.kotlin.storage.StorageManager
@@ -129,9 +126,10 @@ internal class PsiContractParserDispatcher(
 
     fun parseVariable(expression: KtExpression?): VariableReference? {
         if (expression == null) return null
-        val descriptor = expression.getResolvedCall(callContext.bindingContext)?.resultingDescriptor ?: return null
+        val descriptor = expression.getResolvedCall(callContext.bindingContext)?.resultingDescriptor
         if (descriptor !is ParameterDescriptor) {
-            collector.badDescription("only references to parameters are allowed in contract description", expression)
+            if (expression !is KtConstantExpression)
+                collector.badDescription("only references to parameters are allowed in contract description", expression)
             return null
         }
 
diff --git a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/2.kt b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/2.kt
index 8bb678e638e..73f803b5b4e 100644
--- a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/2.kt
+++ b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/2.kt
@@ -25,7 +25,7 @@ fun case_2(value_1: Boolean): Boolean? {
 
 // TESTCASE NUMBER: 3
 fun case_3(value_1: String): Boolean {
-    <!ERROR_IN_CONTRACT_DESCRIPTION!>contract<!> { returns(false) implies (value_1 != "") }
+    contract { returns(false) implies (value_1 != <!ERROR_IN_CONTRACT_DESCRIPTION!>""<!>) }
     return !(value_1 != "")
 }
 
diff --git a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/3.kt b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/3.kt
index 659b17e6068..43c8bf7ae95 100644
--- a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/3.kt
+++ b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/3.kt
@@ -37,7 +37,7 @@ fun case_4(value_1: Nothing?, value_2: Boolean?): Boolean? {
 
 // TESTCASE NUMBER: 5
 fun case_5(value_1: Any?, value_2: String?): Boolean? {
-    <!ERROR_IN_CONTRACT_DESCRIPTION!>contract<!> { returns(null) implies (value_1 != null && value_2 != null || value_2 == ".") }
+    contract { returns(null) implies (value_1 != null && value_2 != null || value_2 == <!ERROR_IN_CONTRACT_DESCRIPTION!>"."<!>) }
     return if (value_1 != null && value_2 != null || value_2 == ".") null else true
 }
 
diff --git a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.kt b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.kt
index 4512fefe0b5..7717898c5e5 100644
--- a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.kt
+++ b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.kt
@@ -51,3 +51,22 @@ fun case_6(value_1: Boolean): Boolean? {
     contract { returns(null) implies <!ERROR_IN_CONTRACT_DESCRIPTION, TYPE_MISMATCH!><!CONTRACT_NOT_ALLOWED, CONTRACT_NOT_ALLOWED!>contract<!> { returns(null) implies (!value_1) }<!> }
     return null
 }
+
+// TESTCASE NUMBER: 7
+fun case_7(): Int {
+    contract {
+        callsInPlace(<!ERROR_IN_CONTRACT_DESCRIPTION!>::case_7<!>, InvocationKind.EXACTLY_ONCE)
+    }
+    return 1
+}
+
+/*
+ * TESTCASE NUMBER: 8
+ * ISSUES: KT-26386
+ */
+fun case_8(): () -> Unit {
+    contract {
+        callsInPlace(<!ERROR_IN_CONTRACT_DESCRIPTION!>case_8()<!>, InvocationKind.EXACTLY_ONCE)
+    }
+    return {}
+}
\ No newline at end of file
diff --git a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.txt b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.txt
index c75b746f078..0d593b9034e 100644
--- a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.txt
+++ b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/common/neg/5.txt
@@ -3,5 +3,8 @@ package
 public fun case_1(): kotlin.Boolean
 public fun case_2(): kotlin.Boolean
 public fun case_3(): kotlin.Boolean
+public fun case_4(): kotlin.Boolean?
 public fun case_5(): kotlin.Boolean?
 public fun case_6(/*0*/ value_1: kotlin.Boolean): kotlin.Boolean?
+public fun case_7(): kotlin.Int
+public fun case_8(): () -> kotlin.Unit
diff --git a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/effects/returns/neg/4.kt b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/effects/returns/neg/4.kt
index b30ca3f49db..4c3a30d2924 100644
--- a/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/effects/returns/neg/4.kt
+++ b/compiler/tests-spec/testData/diagnostics/notLinked/contracts/declarations/contractBuilder/effects/returns/neg/4.kt
@@ -19,7 +19,7 @@ fun case_1(x: Any?): Boolean {
 
 // TESTCASE NUMBER: 2
 fun case_2(x: Any?) {
-    <!ERROR_IN_CONTRACT_DESCRIPTION!>contract<!> { returns() implies (x == "...") }
+    contract { returns() implies (x == <!ERROR_IN_CONTRACT_DESCRIPTION!>"..."<!>) }
     if (x != "...") throw Exception()
 }