diff --git a/abci/types/types.go b/abci/types/types.go
index 5f620b2d5..2fc1d62d0 100644
--- a/abci/types/types.go
+++ b/abci/types/types.go
@@ -264,11 +264,11 @@ func (rpp *ResponsePrepareProposal) Validate(maxSizeBytes int64, otxs [][]byte)
 			if size > maxSizeBytes {
 				return fmt.Errorf("transaction data size %d exceeds maximum %d", size, maxSizeBytes)
 			}
-			if _, ok := ntx[string(tr.Tx)]; ok {
-				return errors.New("duplicate included transaction")
-			}
-			ntx[string(tr.Tx)] = struct{}{}
 		}
+		if _, ok := ntx[string(tr.Tx)]; ok {
+			return errors.New("TxRecords contains duplicate transaction")
+		}
+		ntx[string(tr.Tx)] = struct{}{}
 		if _, ok := otxsSet[string(tr.Tx)]; ok {
 			if tr.Action == TxRecord_ADDED {
 				return fmt.Errorf("unmodified transaction incorrectly marked as %s", tr.Action.String())
diff --git a/abci/types/types_test.go b/abci/types/types_test.go
index be16a4145..6c2b04559 100644
--- a/abci/types/types_test.go
+++ b/abci/types/types_test.go
@@ -87,6 +87,31 @@ func TestValidateResponsePrepareProposal(t *testing.T) {
 		err := rpp.Validate(100, [][]byte{})
 		require.Error(t, err)
 	})
+	t.Run("should error on duplicate transactions", func(t *testing.T) {
+		rpp := &abci.ResponsePrepareProposal{
+			ModifiedTx: true,
+			TxRecords: []*abci.TxRecord{
+				{
+					Action: abci.TxRecord_ADDED,
+					Tx:     []byte{1, 2, 3, 4, 5},
+				},
+				{
+					Action: abci.TxRecord_ADDED,
+					Tx:     []byte{100},
+				},
+				{
+					Action: abci.TxRecord_REMOVED,
+					Tx:     []byte{1, 2, 3, 4, 5},
+				},
+				{
+					Action: abci.TxRecord_ADDED,
+					Tx:     []byte{200},
+				},
+			},
+		}
+		err := rpp.Validate(100, [][]byte{})
+		require.Error(t, err)
+	})
 	t.Run("should error on new transactions marked UNMODIFIED", func(t *testing.T) {
 		rpp := &abci.ResponsePrepareProposal{
 			ModifiedTx: true,