diff --git a/src/app/api/commitments/[id]/early-exit/route.ts b/src/app/api/commitments/[id]/early-exit/route.ts
index 348f6a47..7f972542 100644
--- a/src/app/api/commitments/[id]/early-exit/route.ts
+++ b/src/app/api/commitments/[id]/early-exit/route.ts
@@ -11,6 +11,7 @@ export const POST = withApiHandler(async (req: NextRequest, context: { params: R
 
 export const POST = withApiHandler(async (req: NextRequest, { params }: Params) => {
     const { id } = params;
+    const ip = req.ip ?? req.headers.get('x-forwarded-for') ?? 'anonymous';
 
     const ip = req.ip ?? req.headers.get('x-forwarded-for') ?? 'anonymous';
 
diff --git a/src/app/api/commitments/[id]/settle/route.ts b/src/app/api/commitments/[id]/settle/route.ts
index d9f5a997..c7149fa0 100644
--- a/src/app/api/commitments/[id]/settle/route.ts
+++ b/src/app/api/commitments/[id]/settle/route.ts
@@ -8,6 +8,7 @@ import { TooManyRequestsError, ValidationError, NotFoundError, ConflictError } f
 import { getClientIp } from '@/lib/backend/getClientIp';
 import { settleCommitmentOnChain } from '@/lib/backend/services/contracts';
 import { logCommitmentSettled } from '@/lib/backend/logger';
+import { getCommitmentFromChain } from '@/lib/backend/services/contracts';
 
 const SettleRequestSchema = z.object({
   callerAddress: z.string().optional(),
@@ -34,7 +35,6 @@ export const POST = withApiHandler(
       throw new ValidationError("Commitment ID is required");
     }
 
-    // Parse and validate request body
     let body;
     try {
       body = await req.json();
@@ -50,7 +50,24 @@ export const POST = withApiHandler(
       );
     }
 
-    const { callerAddress } = validation.data;
+    if (commitment.status === 'VIOLATED') {
+        throw new ConflictError('Commitment has been violated and cannot be settled');
+    }
+
+    if (commitment.status === 'EARLY_EXIT') {
+        throw new ConflictError('Commitment has already been exited early');
+    }
+
+    if (commitment.status === 'ACTIVE' && commitment.expiresAt) {
+        const expiryTime = new Date(commitment.expiresAt).getTime();
+        const now = new Date().getTime();
+        if (now < expiryTime) {
+            throw new ValidationError('Commitment has not matured yet and cannot be settled', {
+                currentStatus: commitment.status,
+                expiresAt: commitment.expiresAt,
+            });
+        }
+    }
 
     try {
       const settlementResult = await settleCommitmentOnChain({
diff --git a/src/lib/backend/services/contracts.ts b/src/lib/backend/services/contracts.ts
index 5f433a43..e85d6af1 100644
--- a/src/lib/backend/services/contracts.ts
+++ b/src/lib/backend/services/contracts.ts
@@ -794,3 +794,70 @@ export async function settleCommitmentOnChain(
     });
   }
 }
+
+export async function earlyExitCommitmentOnChain(
+  params: EarlyExitCommitmentOnChainParams
+): Promise<EarlyExitCommitmentOnChainResult> {
+  try {
+    if (!params.commitmentId) {
+      throw new BackendError({
+        code: 'BAD_REQUEST',
+        message: 'Missing commitment id for early exit.',
+        status: 400
+      });
+    }
+
+    const commitment = await getCommitmentFromChain(params.commitmentId);
+
+    if (commitment.status === 'SETTLED') {
+      throw new BackendError({
+        code: 'CONFLICT',
+        message: 'Commitment has already been settled and cannot be exited early.',
+        status: 409
+      });
+    }
+
+    if (commitment.status === 'EARLY_EXIT') {
+      throw new BackendError({
+        code: 'CONFLICT',
+        message: 'Commitment has already been exited early.',
+        status: 409
+      });
+    }
+
+    if (commitment.status === 'VIOLATED') {
+      throw new BackendError({
+        code: 'CONFLICT',
+        message: 'Commitment has been violated and cannot be exited early.',
+        status: 409
+      });
+    }
+
+    const invocation = await invokeContractMethod(
+      getContractId('commitmentCore'),
+      'early_exit_commitment',
+      [params.commitmentId, params.callerAddress ?? commitment.ownerAddress],
+      'write'
+    );
+
+    const result = asRecord(invocation.value);
+    const exitAmount = asString(result.exitAmount, '0');
+    const penaltyAmount = asString(result.penaltyAmount, '0');
+    const finalStatus = asString(result.finalStatus, 'EARLY_EXIT');
+
+    return {
+      exitAmount,
+      penaltyAmount,
+      finalStatus,
+      txHash: invocation.txHash,
+      reference: invocation.txHash ? undefined : `TODO_CHAIN_CALL_EARLY_EXIT`
+    };
+  } catch (error) {
+    throw normalizeBackendError(error, {
+      code: 'BLOCKCHAIN_CALL_FAILED',
+      message: 'Unable to exit commitment early on chain.',
+      status: 502,
+      details: { method: 'early_exit_commitment', commitmentId: params.commitmentId }
+    });
+  }
+}
diff --git a/tests/api/early-exit.test.ts b/tests/api/early-exit.test.ts
new file mode 100644
index 00000000..f236b0fb
--- /dev/null
+++ b/tests/api/early-exit.test.ts
@@ -0,0 +1,173 @@
+import { describe, it, expect, vi, beforeEach } from 'vitest'
+import { POST } from '@/app/api/commitments/[id]/early-exit/route'
+import { createMockRequest, parseResponse } from './helpers'
+import * as contractsModule from '@/lib/backend/services/contracts'
+
+const OWNER_ADDRESS = 'GABC123OWNER456789'
+const OTHER_ADDRESS = 'GXYZ789OTHER123456'
+const COMMITMENT_ID = 'cm_test_123'
+
+async function createEarlyExitRequest(
+  commitmentId: string,
+  body: { actorAddress: string; callerAddress?: string }
+) {
+  return createMockRequest(
+    `http://localhost:3000/api/commitments/${commitmentId}/early-exit`,
+    { method: 'POST', body }
+  )
+}
+
+vi.mock('@/lib/backend/services/contracts', async (importOriginal) => {
+  const actual = await importOriginal()
+  return {
+    ...actual,
+    getCommitmentFromChain: vi.fn(),
+    earlyExitCommitmentOnChain: vi.fn(),
+  }
+})
+
+describe('POST /api/commitments/[id]/early-exit', () => {
+  beforeEach(() => {
+    vi.clearAllMocks()
+  })
+
+  it('should return 200 on successful early exit', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'ACTIVE',
+      amount: '100',
+    }
+    const mockExit = {
+      exitAmount: '90',
+      penaltyAmount: '10',
+      finalStatus: 'EARLY_EXIT',
+      txHash: 'tx123',
+      reference: 'ref123',
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+    vi.mocked(contractsModule.earlyExitCommitmentOnChain).mockResolvedValue(mockExit)
+
+    const request = await createEarlyExitRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(200)
+    expect(result.data.success).toBe(true)
+    expect(result.data.data.commitmentId).toBe(COMMITMENT_ID)
+    expect(result.data.data.exitAmount).toBe('90')
+    expect(result.data.data.penaltyAmount).toBe('10')
+    expect(result.data.data.finalStatus).toBe('EARLY_EXIT')
+  })
+
+  it('should return 403 if actor is not the owner', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'ACTIVE',
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createEarlyExitRequest(COMMITMENT_ID, {
+      actorAddress: OTHER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(403)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('FORBIDDEN')
+  })
+
+  it('should return 409 if already settled', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'SETTLED',
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createEarlyExitRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(409)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('CONFLICT')
+  })
+
+  it('should return 409 if already early exited', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'EARLY_EXIT',
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createEarlyExitRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(409)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('CONFLICT')
+  })
+
+  it('should return 409 if violated', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'VIOLATED',
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createEarlyExitRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(409)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('CONFLICT')
+  })
+
+  it('should return 400 if invalid JSON in request body', async () => {
+    const request = new Request(
+      `http://localhost:3000/api/commitments/${COMMITMENT_ID}/early-exit`,
+      {
+        method: 'POST',
+        headers: { 'Content-Type': 'application/json' },
+        body: 'invalid json',
+      }
+    )
+    const response = await POST(request as any, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(400)
+    expect(result.data.success).toBe(false)
+  })
+
+  it('should return 400 if actor address is missing', async () => {
+    const request = createMockRequest(
+      `http://localhost:3000/api/commitments/${COMMITMENT_ID}/early-exit`,
+      { method: 'POST', body: { callerAddress: 'test' } }
+    )
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(400)
+    expect(result.data.success).toBe(false)
+  })
+})
\ No newline at end of file
diff --git a/tests/api/settle.test.ts b/tests/api/settle.test.ts
new file mode 100644
index 00000000..1513c900
--- /dev/null
+++ b/tests/api/settle.test.ts
@@ -0,0 +1,182 @@
+import { describe, it, expect, vi, beforeEach } from 'vitest'
+import { POST } from '@/app/api/commitments/[id]/settle/route'
+import { createMockRequest, parseResponse } from './helpers'
+import * as contractsModule from '@/lib/backend/services/contracts'
+
+const OWNER_ADDRESS = 'GABC123OWNER456789'
+const OTHER_ADDRESS = 'GXYZ789OTHER123456'
+const COMMITMENT_ID = 'cm_test_123'
+const PAST_EXPIRY = new Date(Date.now() - 1000).toISOString()
+const FUTURE_EXPIRY = new Date(Date.now() + 100000).toISOString()
+
+async function createSettleRequest(
+  commitmentId: string,
+  body: { actorAddress: string; callerAddress?: string }
+) {
+  return createMockRequest(
+    `http://localhost:3000/api/commitments/${commitmentId}/settle`,
+    { method: 'POST', body }
+  )
+}
+
+vi.mock('@/lib/backend/services/contracts', async (importOriginal) => {
+  const actual = await importOriginal()
+  return {
+    ...actual,
+    getCommitmentFromChain: vi.fn(),
+    settleCommitmentOnChain: vi.fn(),
+  }
+})
+
+describe('POST /api/commitments/[id]/settle', () => {
+  beforeEach(() => {
+    vi.clearAllMocks()
+  })
+
+  it('should return 200 on successful settlement', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'ACTIVE',
+      expiresAt: PAST_EXPIRY,
+    }
+    const mockSettlement = {
+      settlementAmount: '100',
+      finalStatus: 'SETTLED',
+      txHash: 'tx123',
+      reference: 'ref123',
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+    vi.mocked(contractsModule.settleCommitmentOnChain).mockResolvedValue(mockSettlement)
+
+    const request = await createSettleRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(200)
+    expect(result.data.success).toBe(true)
+    expect(result.data.data.commitmentId).toBe(COMMITMENT_ID)
+    expect(result.data.data.settlementAmount).toBe('100')
+    expect(result.data.data.finalStatus).toBe('SETTLED')
+  })
+
+  it('should return 403 if actor is not the owner', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'ACTIVE',
+      expiresAt: PAST_EXPIRY,
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createSettleRequest(COMMITMENT_ID, {
+      actorAddress: OTHER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(403)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('FORBIDDEN')
+  })
+
+  it('should return 409 if already settled', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'SETTLED',
+      expiresAt: PAST_EXPIRY,
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createSettleRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(409)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('CONFLICT')
+  })
+
+  it('should return 409 if violated', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'VIOLATED',
+      expiresAt: PAST_EXPIRY,
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createSettleRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(409)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('CONFLICT')
+  })
+
+  it('should return 409 if early exited', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'EARLY_EXIT',
+      expiresAt: PAST_EXPIRY,
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createSettleRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(409)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('CONFLICT')
+  })
+
+  it('should return 400 if commitment has not matured', async () => {
+    const mockCommitment = {
+      id: COMMITMENT_ID,
+      ownerAddress: OWNER_ADDRESS,
+      status: 'ACTIVE',
+      expiresAt: FUTURE_EXPIRY,
+    }
+
+    vi.mocked(contractsModule.getCommitmentFromChain).mockResolvedValue(mockCommitment)
+
+    const request = await createSettleRequest(COMMITMENT_ID, {
+      actorAddress: OWNER_ADDRESS,
+    })
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(400)
+    expect(result.data.success).toBe(false)
+    expect(result.data.error.code).toBe('VALIDATION_ERROR')
+  })
+
+  it('should return 400 if actor address is missing', async () => {
+    const request = createMockRequest(
+      `http://localhost:3000/api/commitments/${COMMITMENT_ID}/settle`,
+      { method: 'POST', body: { callerAddress: 'test' } }
+    )
+    const response = await POST(request, { params: { id: COMMITMENT_ID } })
+    const result = await parseResponse(response)
+
+    expect(result.status).toBe(400)
+    expect(result.data.success).toBe(false)
+  })
+})
\ No newline at end of file