diff --git a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/calls/CandidateCollector.kt b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/calls/CandidateCollector.kt
index 0e22e9bd35d..2b1165be5a5 100644
--- a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/calls/CandidateCollector.kt
+++ b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/calls/CandidateCollector.kt
@@ -8,9 +8,8 @@ package org.jetbrains.kotlin.fir.resolve.calls
 import org.jetbrains.kotlin.fir.resolve.BodyResolveComponents
 import org.jetbrains.kotlin.fir.resolve.calls.tower.TowerGroup
 import org.jetbrains.kotlin.resolve.calls.tower.CandidateApplicability
-import org.jetbrains.kotlin.resolve.calls.tower.CandidateApplicability.K2_DSL_SCOPE_VIOLATION
-import org.jetbrains.kotlin.resolve.calls.tower.CandidateApplicability.K2_SYNTHETIC_RESOLVED
 import org.jetbrains.kotlin.resolve.calls.tower.isSuccess
+import org.jetbrains.kotlin.resolve.calls.tower.shouldStopResolve
 
 open class CandidateCollector(
     val components: BodyResolveComponents,
@@ -53,7 +52,7 @@ open class CandidateCollector(
         shouldStopResolve && bestGroup < group
 
     private val shouldStopResolve: Boolean
-        get() = currentApplicability == K2_DSL_SCOPE_VIOLATION || currentApplicability >= K2_SYNTHETIC_RESOLVED
+        get() = currentApplicability.shouldStopResolve
 
     val isSuccess: Boolean
         get() = currentApplicability.isSuccess
diff --git a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/tower/CandidateApplicability.kt b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/tower/CandidateApplicability.kt
index 8a0e3516971..934078efc05 100644
--- a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/tower/CandidateApplicability.kt
+++ b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/tower/CandidateApplicability.kt
@@ -25,7 +25,7 @@ enum class CandidateApplicability {
     // Below has isSuccess = true
     RESOLVED_LOW_PRIORITY,
     K2_PROPERTY_AS_OPERATOR, // using property of functional type as an operator. From resolution perspective, this is considered successful.
-    RESOLVED_NEED_PRESERVE_COMPATIBILITY, // call resolved successfully, but using new features that changes resolve
+    RESOLVED_NEED_PRESERVE_COMPATIBILITY, // call resolved successfully, but using new features that change resolve
 
     // Tower resolve does not go to further scopes if candidate with applicability below is found
 
@@ -34,5 +34,16 @@ enum class CandidateApplicability {
     RESOLVED, // call success or has uncompleted inference or in other words possible successful candidate
 }
 
+/**
+ * This property determines that the considered candidate is "successful" in terms of having no resolve errors.
+ * Note that it does not necessarily mean tower resolve should stop on this candidate.
+ */
 val CandidateApplicability.isSuccess: Boolean
-    get() = this >= CandidateApplicability.RESOLVED_LOW_PRIORITY
+    get() = this >= CandidateApplicability.RESOLVED_LOW_PRIORITY && this != CandidateApplicability.K1_RESOLVED_WITH_ERROR
+
+/**
+ * This property determines that tower resolve should stop on the candidate/group with this applicability
+ * and should not go to further scope levels. Note that candidate can still have error(s).
+ */
+val CandidateApplicability.shouldStopResolve: Boolean
+    get() = this == CandidateApplicability.K2_DSL_SCOPE_VIOLATION || this >= CandidateApplicability.K2_SYNTHETIC_RESOLVED
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt
index 63d9b32b075..ac2e3b67f2d 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt
@@ -29,9 +29,13 @@ sealed class ResolutionCandidate : Candidate, KotlinDiagnosticsHolder {
     override val isSuccessful: Boolean
         get() {
             processParts(stopOnFirstError = true)
-            return resultingApplicabilities.minOrNull()!!.isSuccess && !getSystem().hasContradiction
+            // Note: candidate with K1_RESOLVED_WITH_ERROR is exceptionally treated as successful
+            return resultingApplicabilities.minOrNull()!!.isSuccessOrSuccessWithError && !getSystem().hasContradiction
         }
 
+    private val CandidateApplicability.isSuccessOrSuccessWithError: Boolean
+        get() = this >= CandidateApplicability.RESOLVED_LOW_PRIORITY
+
     override val resultingApplicability: CandidateApplicability
         get() {
             processParts(stopOnFirstError = false)
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/tower/TowerResolver.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/tower/TowerResolver.kt
index b8c473fb0d3..518f4756a45 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/tower/TowerResolver.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/tower/TowerResolver.kt
@@ -424,30 +424,30 @@ class TowerResolver {
             if (!isSuccessful) return null
             var compatibilityCandidate: C? = null
             var compatibilityGroup: Collection<C>? = null
-            var firstGroupWithResolved: Collection<C>? = null
+            var shouldStopGroup: Collection<C>? = null
             outer@ for (group in candidateGroups) {
                 for (candidate in group) {
-                    if (isSuccessfulCandidate(candidate)) {
-                        firstGroupWithResolved = group
+                    if (shouldStopResolveOnCandidate(candidate)) {
+                        shouldStopGroup = group
                         break@outer
                     }
 
-                    if (compatibilityCandidate == null && isSuccessfulPreserveCompatibility(candidate)) {
+                    if (compatibilityCandidate == null && isPreserveCompatibilityCandidate(candidate)) {
                         compatibilityGroup = group
                         compatibilityCandidate = candidate
                     }
                 }
             }
 
-            if (firstGroupWithResolved == null) return null
+            if (shouldStopGroup == null) return null
             if (compatibilityCandidate != null
-                && compatibilityGroup !== firstGroupWithResolved
+                && compatibilityGroup !== shouldStopGroup
                 && needToReportCompatibilityWarning(compatibilityCandidate)
             ) {
-                firstGroupWithResolved.forEach { it.addCompatibilityWarning(compatibilityCandidate) }
+                shouldStopGroup.forEach { it.addCompatibilityWarning(compatibilityCandidate) }
             }
 
-            return firstGroupWithResolved.filter(::isSuccessfulCandidate)
+            return shouldStopGroup.filter(::shouldStopResolveOnCandidate)
         }
 
         private fun needToReportCompatibilityWarning(candidate: C) = candidate is ResolutionCandidate &&
@@ -455,12 +455,11 @@ class TowerResolver {
                     (it.constraintSystemError as? LowerPriorityToPreserveCompatibility)?.needToReportWarning == true
                 }
 
-        private fun isSuccessfulCandidate(candidate: C): Boolean {
-            return candidate.resultingApplicability == CandidateApplicability.RESOLVED
-                    || candidate.resultingApplicability == CandidateApplicability.K1_RESOLVED_WITH_ERROR
+        private fun shouldStopResolveOnCandidate(candidate: C): Boolean {
+            return candidate.resultingApplicability.shouldStopResolve
         }
 
-        private fun isSuccessfulPreserveCompatibility(candidate: C): Boolean =
+        private fun isPreserveCompatibilityCandidate(candidate: C): Boolean =
             candidate.resultingApplicability == CandidateApplicability.RESOLVED_NEED_PRESERVE_COMPATIBILITY
 
         override fun pushCandidates(candidates: Collection<C>) {