diff --git a/abci/example/orderbook/app.go b/abci/example/orderbook/app.go
index ab14dbfd7..0132126fc 100644
--- a/abci/example/orderbook/app.go
+++ b/abci/example/orderbook/app.go
@@ -33,6 +33,7 @@ type StateMachine struct {
 }
 
 func New() *StateMachine {
+	StateMachine := StateMachine {}
 	return &StateMachine{}
 }
 
@@ -285,13 +286,12 @@ func (sm *StateMachine) ProcessProposal(req types.RequestProcessProposal) types.
 			}
 
 		case *Msg_MsgTradeSet:
+			// for each matched order
+			// check the accounts exist, that the signatures are valid and that they have the available funds to make the swap
 			if err := m.MsgTradeSet.TradeSet.ValidateBasic(); err != nil {
 				return rejectProposal()
 			}
 
-			// for each matched order 
-			// check the accounts exist, that the signatures are valid and that they have the available funds to make the swap
-
 		default:
 			return rejectProposal()
 
diff --git a/abci/example/orderbook/app_test.go b/abci/example/orderbook/app_test.go
index 617777486..774506da7 100644
--- a/abci/example/orderbook/app_test.go
+++ b/abci/example/orderbook/app_test.go
@@ -1,16 +1,20 @@
 package orderbook_test
 
 import (
-	"fmt"
 	"testing"
 
-	"github.com/stretchr/testify/require"
 	"github.com/tendermint/tendermint/abci/example/orderbook"
+	"github.com/tendermint/tendermint/abci/types"
 )
 
-func TestPrepareProposal(t *testing.T) {
-	// check to see if the market collected all of the pairs
+func TestNew(t *testing.T) {
+	StateMachine := New()
+	// initialise market
 	market := orderbook.NewMarket(testPair)
-	require.EqualValues(t, )
-}
+	// create transaction
+	response := S.PrepareProposal(types.RequestPrepareProposal{})
 
+	// check to see if the market collected all of the pairs
+	// test to see if the tradeset is valid
+	// require.EqualValues(t, )
+}
diff --git a/abci/example/orderbook/types.go b/abci/example/orderbook/types.go
index bd1298360..7b168b115 100644
--- a/abci/example/orderbook/types.go
+++ b/abci/example/orderbook/types.go
@@ -39,7 +39,6 @@ func (msg *MsgAsk) ValidateBasic() error {
 		return errors.New("invalid signature size")
 	}
 
-
 	//quantity to be more than 0
 	// price to not be 0
 
@@ -92,26 +91,44 @@ func (p *Pair) ValidateBasic() error {
 
 func (o *OrderBid) ValidateBasic() error {
 	if o.MaxQuantity == 0 {
-		return errors.New("quantity outbound must be non zero")
+		return errors.New("max quantity must be non zero")
 	}
 
 	if o.MaxPrice <= 0 {
 		return errors.New("min price must be greater than 0")
 	}
-	
+
 	return nil
 }
+// check signatures are valid
 
 func (m *MatchedOrder) ValidateBasic() error {
 	if len(m.OrderAsk.Signature) != ed25519.SignatureSize {
 		return errors.New("invalid signature size")
 	}
+
+	if len(m.OrderBid.Signature) != ed25519.SignatureSize {
+		return errors.New("invalid signature size")
+	}
+	return nil
 }
 
 func (t *TradeSet) ValidateBasic() error {
-	return t.Pair.ValidateBasic()
-	return t.MatchedOrders.ValidateBasic()
+	for _, matchedOrder := range t.MatchedOrders {
+		if err := matchedOrder.ValidateBasic(); err != nil {
+			return err
+		}
+		// checking if there is an account
+		if matchedOrder.OrderAsk.OwnerId == 0 {
+			return errors.New("must have an owner id more than zero")
+		}
+	}
+	// validate the pairs are valid
+	if err := t.Pair.ValidateBasic(); err != nil {
+		return err
+	}
 
+	return nil
 }
 
 func (o *OrderAsk) ValidateBasic() error {
@@ -133,4 +150,4 @@ func (a *Account) FindCommidity(denom string) *Commodity {
 		}
 	}
 	return nil
-}
\ No newline at end of file
+}