diff --git a/runtime/lua/modules/contract/module.go b/runtime/lua/modules/contract/module.go
index 6f8c3a2c4..0d6fdb022 100644
--- a/runtime/lua/modules/contract/module.go
+++ b/runtime/lua/modules/contract/module.go
@@ -5,6 +5,7 @@ package contract
 import (
 	"context"
 	"net/url"
+	"reflect"
 	"strconv"
 	"strings"
 
@@ -105,6 +106,23 @@ type InstanceWrapper struct {
 	hasOptions bool
 }
 
+// isNilInstance handles both a nil contract.Instance interface and an interface
+// containing a typed nil pointer. The latter can cross a Go interface boundary
+// without comparing equal to nil and would otherwise panic on Implements/Call.
+func isNilInstance(instance contract.Instance) bool {
+	if instance == nil {
+		return true
+	}
+
+	value := reflect.ValueOf(instance)
+	switch value.Kind() {
+	case reflect.Chan, reflect.Func, reflect.Interface, reflect.Map, reflect.Ptr, reflect.Slice:
+		return value.IsNil()
+	default:
+		return false
+	}
+}
+
 func applyOpenSecurityContext(ctx context.Context, yield *OpenYield, actor secapi.Actor, hasActor bool, scope secapi.Scope, hasScope bool) {
 	if hasActor {
 		yield.Actor = actor
@@ -273,7 +291,7 @@ func isContract(l *lua.LState) int {
 	contractID := l.CheckString(2)
 
 	wrapper, ok := ud.Value.(*InstanceWrapper)
-	if !ok {
+	if !ok || wrapper == nil || isNilInstance(wrapper.instance) {
 		l.Push(lua.LBool(false))
 		return 1
 	}
diff --git a/runtime/lua/modules/contract/module_test.go b/runtime/lua/modules/contract/module_test.go
index 25828aed7..be52b3a35 100644
--- a/runtime/lua/modules/contract/module_test.go
+++ b/runtime/lua/modules/contract/module_test.go
@@ -292,6 +292,47 @@ func TestOpenYield_HandleResult(t *testing.T) {
 	require.Len(t, results, 2)
 	assert.Equal(t, lua.LNil, results[0])
 	assert.NotEqual(t, lua.LNil, results[1])
+
+	// A successful dispatcher response must still carry an instance. This
+	// protects the Lua boundary from wrapping a nil instance and letting
+	// contract.is or instance method dispatch dereference it later.
+	results = y.HandleResult(l, contract.OpenResult{}, nil)
+	require.Len(t, results, 2)
+	assert.Equal(t, lua.LNil, results[0])
+	assert.Contains(t, results[1].String(), "contract instance is nil")
+
+	// An interface containing a typed nil pointer is not itself equal to nil;
+	// the boundary must reject that shape as well and preserve its error class.
+	var typedNil *mockInstanceForTest
+	results = y.HandleResult(l, contract.OpenResult{Instance: typedNil}, nil)
+	require.Len(t, results, 2)
+	assert.Equal(t, lua.LNil, results[0])
+	luaErr, ok := lua.AsError(results[1])
+	require.True(t, ok)
+	assert.Equal(t, lua.Internal, luaErr.Kind())
+	assert.Equal(t, lua.TernaryFalse, luaErr.Retryable())
+}
+
+func TestIsContract_NilInstanceValuesReturnFalse(t *testing.T) {
+	l := lua.NewState()
+	defer l.Close()
+
+	assertFalse := func(t *testing.T, value any) {
+		t.Helper()
+		l.SetTop(0)
+		ud := l.NewUserData()
+		ud.Value = value
+		l.Push(ud)
+		l.Push(lua.LString("test:contract"))
+		require.Equal(t, 1, isContract(l))
+		assert.Equal(t, lua.LFalse, l.Get(-1))
+	}
+
+	assertFalse(t, (*InstanceWrapper)(nil))
+	assertFalse(t, &InstanceWrapper{})
+
+	var typedNil *mockInstanceForTest
+	assertFalse(t, &InstanceWrapper{instance: typedNil})
 }
 
 func TestOpenYield_HandleResult_WithOptions(t *testing.T) {
diff --git a/runtime/lua/modules/contract/yields.go b/runtime/lua/modules/contract/yields.go
index 0dfbc3fd7..bf59a2600 100644
--- a/runtime/lua/modules/contract/yields.go
+++ b/runtime/lua/modules/contract/yields.go
@@ -70,6 +70,12 @@ func (y *OpenYield) HandleResult(l *lua.LState, data any, err error) []lua.LValu
 		luaErr := lua.WrapErrorWithLua(l, resp.Error, "")
 		return []lua.LValue{lua.LNil, luaErr}
 	}
+	if isNilInstance(resp.Instance) {
+		luaErr := lua.WrapErrorWithLua(l, contract.ErrInstanceNil, "open failed").
+			WithKind(lua.Internal).
+			WithRetryable(false)
+		return []lua.LValue{lua.LNil, luaErr}
+	}
 
 	// Wrap instance in userdata
 	wrapper := &InstanceWrapper{