diff --git a/x/cosmostest/keeper/msg_server_new_bid.go b/x/cosmostest/keeper/msg_server_new_bid.go
index a0d80f1..b86aa26 100644
--- a/x/cosmostest/keeper/msg_server_new_bid.go
+++ b/x/cosmostest/keeper/msg_server_new_bid.go
@@ -15,7 +15,7 @@ import (
 func (k msgServer) NewBid(goCtx context.Context, msg *types.MsgNewBid) (*types.MsgNewBidResponse, error) {
 	ctx := sdk.UnwrapSDKContext(goCtx)
 
-	_, found := k.Keeper.GetAuction(ctx, msg.AuctionIndex)
+	auction, found := k.Keeper.GetAuction(ctx, msg.AuctionIndex)
 	if !found {
 		return nil, fmt.Errorf("didn't find auction of index %s", msg.AuctionIndex)
 	}
@@ -38,6 +38,12 @@ func (k msgServer) NewBid(goCtx context.Context, msg *types.MsgNewBid) (*types.M
 		return nil, fmt.Errorf("bid amount must be greater than 0")
 	}
 
+	ceiling := new(big.Int)
+	ceiling.SetString(auction.Ceiling, 10)
+	if amt.Cmp(ceiling) == 1 {
+		return nil, fmt.Errorf("bid amount cannot be greater than auction price ceiling (%s)", auction.Ceiling)
+	}
+
 	lowestBid, err := memdb.BidDB.GetLowestBid(msg.AuctionIndex)
 	// we manually handle KeyNotFound in GetHighestBid, so should return (nil, nil) if not found
 	if err != nil {