diff --git a/src/TransactionAction.cpp b/src/TransactionAction.cpp
index 81b9fe85d5..c4aa817c93 100644
--- a/src/TransactionAction.cpp
+++ b/src/TransactionAction.cpp
@@ -1136,24 +1136,37 @@ Log(lsINFO) << boost::str(boost::format("doOfferCreate: saTakerPays=%s saTakerGe
 TER TransactionEngine::doOfferCancel(const SerializedTransaction& txn)
 {
 	TER				terResult;
-	const uint32	uSequence	= txn.getFieldU32(sfOfferSequence);
-	const uint256	uOfferIndex	= Ledger::getOfferIndex(mTxnAccountID, uSequence);
-	SLE::pointer	sleOffer	= entryCache(ltOFFER, uOfferIndex);
+	const uint32	uOfferSequence			= txn.getFieldU32(sfOfferSequence);
+	const uint32	uAccountSequenceNext	= mTxnAccount->getFieldU32(sfSequence);
 
-	if (sleOffer)
+	Log(lsDEBUG) << "doOfferCancel: uAccountSequenceNext=" << uAccountSequenceNext << " uOfferSequence=" << uOfferSequence;
+
+	if (!uOfferSequence || uAccountSequenceNext-1 <= uOfferSequence)
 	{
-		Log(lsWARNING) << "doOfferCancel: uSequence=" << uSequence;
+		Log(lsINFO) << "doOfferCancel: uAccountSequenceNext=" << uAccountSequenceNext << " uOfferSequence=" << uOfferSequence;
 
-		terResult	= mNodes.offerDelete(sleOffer, uOfferIndex, mTxnAccountID);
+		terResult	= temBAD_SEQUENCE;
 	}
 	else
 	{
-		Log(lsWARNING) << "doOfferCancel: offer not found: "
-			<< NewcoinAddress::createHumanAccountID(mTxnAccountID)
-			<< " : " << uSequence
-			<< " : " << uOfferIndex.ToString();
+		const uint256	uOfferIndex	= Ledger::getOfferIndex(mTxnAccountID, uOfferSequence);
+		SLE::pointer	sleOffer	= entryCache(ltOFFER, uOfferIndex);
 
-		terResult	= terOFFER_NOT_FOUND;
+		if (sleOffer)
+		{
+			Log(lsWARNING) << "doOfferCancel: uOfferSequence=" << uOfferSequence;
+
+			terResult	= mNodes.offerDelete(sleOffer, uOfferIndex, mTxnAccountID);
+		}
+		else
+		{
+			Log(lsWARNING) << "doOfferCancel: offer not found: "
+				<< NewcoinAddress::createHumanAccountID(mTxnAccountID)
+				<< " : " << uOfferSequence
+				<< " : " << uOfferIndex.ToString();
+
+			terResult	= tesSUCCESS;
+		}
 	}
 
 	return terResult;
@@ -1179,7 +1192,6 @@ TER	TransactionEngine::doContractAdd(const SerializedTransaction& txn)
 
 	// place contract in ledger
 	// run create code
-	
 
 	if (mLedger->getParentCloseTimeNC() >= expiration)
 	{
diff --git a/src/TransactionErr.cpp b/src/TransactionErr.cpp
index f85f0cda4b..9f50b4d3ab 100644
--- a/src/TransactionErr.cpp
+++ b/src/TransactionErr.cpp
@@ -33,6 +33,7 @@ bool transResultInfo(TER terCode, std::string& strToken, std::string& strHuman)
 		{	temBAD_PUBLISH,			"temBAD_PUBLISH",			"Malformed: Bad publish."								},
 		{	temBAD_TRANSFER_RATE,	"temBAD_TRANSFER_RATE",		"Malformed: Transfer rate must be >= 1.0"				},
 		{	temBAD_SET_ID,			"temBAD_SET_ID",			"Malformed."											},
+		{	temBAD_SEQUENCE,		"temBAD_SEQUENCE",			"Malformed: Sequence in not in the past."				},
 		{	temCREATEXNS,			"temCREATEXNS",				"Can not specify non XNS for Create."					},
 		{	temDST_IS_SRC,			"temDST_IS_SRC",			"Destination may not be source."						},
 		{	temDST_NEEDED,			"temDST_NEEDED",			"Destination not specified."							},
@@ -53,7 +54,6 @@ bool transResultInfo(TER terCode, std::string& strToken, std::string& strHuman)
 		{	terNO_DST,				"terNO_DST",				"The destination does not exist."						},
 		{	terNO_LINE,				"terNO_LINE",				"No such line."											},
 		{	terNO_LINE_NO_ZERO,		"terNO_LINE_NO_ZERO",		"Can't zero non-existant line, destination might make it."	},
-		{	terOFFER_NOT_FOUND,		"terOFFER_NOT_FOUND",		"Can not cancel offer."									},
 		{	terPRE_SEQ,				"terPRE_SEQ",				"Missing/inapplicable prior transaction."				},
 		{	terSET_MISSING_DST,		"terSET_MISSING_DST",		"Can't set password, destination missing."				},
 		{	terUNFUNDED,			"terUNFUNDED",				"Source account had insufficient balance for transaction."	},
diff --git a/src/TransactionErr.h b/src/TransactionErr.h
index e2aa0e4436..f672caf7f3 100644
--- a/src/TransactionErr.h
+++ b/src/TransactionErr.h
@@ -34,6 +34,7 @@ enum TER	// aka TransactionEngineResult
 	temBAD_PATH_LOOP,
 	temBAD_PUBLISH,
 	temBAD_TRANSFER_RATE,
+	temBAD_SEQUENCE,
 	temBAD_SET_ID,
 	temCREATEXNS,
 	temDST_IS_SRC,
@@ -83,7 +84,6 @@ enum TER	// aka TransactionEngineResult
 	terNO_DST,
 	terNO_LINE,
 	terNO_LINE_NO_ZERO,
-	terOFFER_NOT_FOUND, // XXX If we check sequence first this could be hard failure.
 	terPRE_SEQ,
 	terSET_MISSING_DST,
 	terUNFUNDED,