diff --git a/src/app/tests/TestCommandInteraction.cpp b/src/app/tests/TestCommandInteraction.cpp
index df42d3fdb8c70d..8c94259d5fe489 100644
--- a/src/app/tests/TestCommandInteraction.cpp
+++ b/src/app/tests/TestCommandInteraction.cpp
@@ -26,6 +26,7 @@
 
 #include <app/AppBuildConfig.h>
 #include <app/InteractionModelEngine.h>
+#include <app/data-model/Encode.h>
 #include <app/tests/AppTestContext.h>
 #include <lib/core/CHIPCore.h>
 #include <lib/core/CHIPTLV.h>
@@ -178,6 +179,8 @@ class TestCommandInteraction
     static void TestCommandHandlerWithProcessReceivedNotExistCommand(nlTestSuite * apSuite, void * apContext);
     static void TestCommandHandlerWithSendSimpleCommandData(nlTestSuite * apSuite, void * apContext);
     static void TestCommandHandlerCommandDataEncoding(nlTestSuite * apSuite, void * apContext);
+    static void TestCommandHandlerCommandEncodeFailure(nlTestSuite * apSuite, void * apContext);
+    static void TestCommandHandlerCommandEncodeExternalFailure(nlTestSuite * apSuite, void * apContext);
     static void TestCommandHandlerWithSendSimpleStatusCode(nlTestSuite * apSuite, void * apContext);
     static void TestCommandHandlerWithSendEmptyResponse(nlTestSuite * apSuite, void * apContext);
     static void TestCommandHandlerWithProcessReceivedMsg(nlTestSuite * apSuite, void * apContext);
@@ -514,6 +517,23 @@ struct Fields
     }
 };
 
+struct BadFields
+{
+    static constexpr chip::CommandId GetCommandId() { return 4; }
+    CHIP_ERROR Encode(TLV::TLVWriter & aWriter, TLV::Tag aTag) const
+    {
+        TLV::TLVType outerContainerType;
+        uint8_t data[36] = { 0 };
+        ReturnErrorOnFailure(aWriter.StartContainer(aTag, TLV::kTLVType_Structure, outerContainerType));
+        // Just encode something bad to return a failure state here.
+        for (uint8_t i = 1; i < UINT8_MAX; i++)
+        {
+            ReturnErrorOnFailure(app::DataModel::Encode(aWriter, TLV::ContextTag(i), ByteSpan(data)));
+        }
+        return aWriter.EndContainer(outerContainerType);
+    }
+};
+
 void TestCommandInteraction::TestCommandHandlerCommandDataEncoding(nlTestSuite * apSuite, void * apContext)
 {
     TestContext & ctx = *static_cast<TestContext *>(apContext);
@@ -542,6 +562,66 @@ void TestCommandInteraction::TestCommandHandlerCommandDataEncoding(nlTestSuite *
 #endif
 }
 
+void TestCommandInteraction::TestCommandHandlerCommandEncodeFailure(nlTestSuite * apSuite, void * apContext)
+{
+    TestContext & ctx = *static_cast<TestContext *>(apContext);
+    CHIP_ERROR err    = CHIP_NO_ERROR;
+    app::CommandHandler commandHandler(nullptr);
+    System::PacketBufferHandle commandPacket;
+
+    TestExchangeDelegate delegate;
+    commandHandler.mpExchangeCtx = ctx.NewExchangeToAlice(&delegate);
+
+    auto path = MakeTestCommandPath();
+
+    err = commandHandler.AddResponseDataOrFailureStatus(ConcreteCommandPath(path.mEndpointId, path.mClusterId, path.mCommandId),
+                                                        BadFields());
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+    err = commandHandler.Finalize(commandPacket);
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+
+#if CHIP_CONFIG_IM_ENABLE_SCHEMA_CHECK
+    chip::System::PacketBufferTLVReader reader;
+    InvokeResponseMessage::Parser invokeResponseMessageParser;
+    reader.Init(std::move(commandPacket));
+    err = invokeResponseMessageParser.Init(reader);
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+    err = invokeResponseMessageParser.CheckSchemaValidity();
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+#endif
+}
+
+void TestCommandInteraction::TestCommandHandlerCommandEncodeExternalFailure(nlTestSuite * apSuite, void * apContext)
+{
+    TestContext & ctx = *static_cast<TestContext *>(apContext);
+    CHIP_ERROR err    = CHIP_NO_ERROR;
+    app::CommandHandler commandHandler(nullptr);
+    System::PacketBufferHandle commandPacket;
+
+    TestExchangeDelegate delegate;
+    commandHandler.mpExchangeCtx = ctx.NewExchangeToAlice(&delegate);
+
+    auto path = MakeTestCommandPath();
+
+    err = commandHandler.AddResponseData(ConcreteCommandPath(path.mEndpointId, path.mClusterId, path.mCommandId), BadFields());
+    NL_TEST_ASSERT(apSuite, err != CHIP_NO_ERROR);
+    err = commandHandler.AddStatus(ConcreteCommandPath(path.mEndpointId, path.mClusterId, path.mCommandId),
+                                   Protocols::InteractionModel::Status::Failure);
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+    err = commandHandler.Finalize(commandPacket);
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+
+#if CHIP_CONFIG_IM_ENABLE_SCHEMA_CHECK
+    chip::System::PacketBufferTLVReader reader;
+    InvokeResponseMessage::Parser invokeResponseMessageParser;
+    reader.Init(std::move(commandPacket));
+    err = invokeResponseMessageParser.Init(reader);
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+    err = invokeResponseMessageParser.CheckSchemaValidity();
+    NL_TEST_ASSERT(apSuite, err == CHIP_NO_ERROR);
+#endif
+}
+
 void TestCommandInteraction::TestCommandHandlerWithSendSimpleStatusCode(nlTestSuite * apSuite, void * apContext)
 {
     // Send response which has simple status code and command path
@@ -768,6 +848,8 @@ const nlTest sTests[] =
     NL_TEST_DEF("TestCommandSenderWithProcessReceivedMsg", chip::app::TestCommandInteraction::TestCommandSenderWithProcessReceivedMsg),
     NL_TEST_DEF("TestCommandHandlerWithSendSimpleCommandData", chip::app::TestCommandInteraction::TestCommandHandlerWithSendSimpleCommandData),
     NL_TEST_DEF("TestCommandHandlerCommandDataEncoding", chip::app::TestCommandInteraction::TestCommandHandlerCommandDataEncoding),
+    NL_TEST_DEF("TestCommandHandlerCommandEncodeFailure", chip::app::TestCommandInteraction::TestCommandHandlerCommandEncodeFailure),
+    NL_TEST_DEF("TestCommandHandlerCommandEncodeExternalFailure", chip::app::TestCommandInteraction::TestCommandHandlerCommandEncodeExternalFailure),
     NL_TEST_DEF("TestCommandHandlerWithSendSimpleStatusCode", chip::app::TestCommandInteraction::TestCommandHandlerWithSendSimpleStatusCode),
     NL_TEST_DEF("TestCommandHandlerWithProcessReceivedMsg", chip::app::TestCommandInteraction::TestCommandHandlerWithProcessReceivedMsg),
     NL_TEST_DEF("TestCommandHandlerWithProcessReceivedNotExistCommand", chip::app::TestCommandInteraction::TestCommandHandlerWithProcessReceivedNotExistCommand),