diff --git a/src/smart_contract/contract_tests.rs b/src/smart_contract/contract_tests.rs
new file mode 100644
index 0000000..e283898
--- /dev/null
+++ b/src/smart_contract/contract_tests.rs
@@ -0,0 +1,32 @@
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use ink_env::test;
+
+    #[ink::test]
+    fn test_transfer() {
+        let mut contract = MyContract::new();
+        let accounts = test::default_accounts();
+        let initial_balance = 100;
+
+        // Set initial balances
+        contract.balances.insert(accounts.alice, initial_balance);
+        contract.balances.insert(accounts.bob, 0);
+
+        // Transfer funds
+        assert_eq!(contract.transfer(accounts.bob, 50), Ok(()));
+        assert_eq!(contract.balance_of(accounts.alice), 50);
+        assert_eq!(contract.balance_of(accounts.bob), 50);
+    }
+
+    #[ink::test]
+    fn test_insufficient_balance() {
+        let mut contract = MyContract::new();
+        let accounts = test::default_accounts();
+        contract.balances.insert(accounts.alice, 10);
+        contract.balances.insert(accounts.bob, 0);
+
+        // Attempt to transfer more than available balance
+        assert_eq!(contract.transfer(accounts.bob, 20), Err("Insufficient balance"));
+    }
+}