diff --git a/cms/djangoapps/contentstore/tests/test_contentstore.py b/cms/djangoapps/contentstore/tests/test_contentstore.py
index 7622ee7661..f2a3443648 100644
--- a/cms/djangoapps/contentstore/tests/test_contentstore.py
+++ b/cms/djangoapps/contentstore/tests/test_contentstore.py
@@ -264,6 +264,7 @@ class ContentStoreToyCourseTest(ModuleStoreTestCase):
         self.assertContains(resp, '/c4x/edX/full/asset/handouts_schematic_tutorial.pdf')
 
 
+
 class ContentStoreTest(ModuleStoreTestCase):
     """
     Tests for the CMS ContentStore application.
@@ -422,6 +423,35 @@ class ContentStoreTest(ModuleStoreTestCase):
         self.assertNotIn('markdown', problem.editable_metadata_fields, "Markdown slipped into the editable metadata fields")
 
 
+    def test_metadata_inheritance(self):
+        import_from_xml(modulestore(), 'common/test/data/', ['full'])
+
+        ms = modulestore('direct')
+        course = ms.get_item(Location(['i4x', 'edX', 'full', 'course', '6.002_Spring_2012', None]))
+
+        verticals = ms.get_items(['i4x', 'edX', 'full', 'vertical', None, None])
+
+        self.assertGreater(len(verticals), 0)
+
+        new_component_location = Location('i4x', 'edX', 'full', 'html', 'new_component')
+        source_template_location = Location('i4x', 'edx', 'templates', 'html', 'Empty')
+        
+        # crate a new module and add it as a child to a vertical
+        ms.clone_item(source_template_location, new_component_location)
+        parent = verticals[0]
+        ms.update_children(parent.location, parent.definition.get('children', []) + [new_component_location.url()])
+
+        # flush the cache
+        ms.get_cached_metadata_inheritance_tree(new_component_location, -1)
+        new_module = ms.get_item(new_component_location)
+
+        # check for grace period definition which should be defined at the course level
+        self.assertIn('graceperiod', new_module.metadata)
+
+        self.assertEqual(course.metadata['graceperiod'], new_module.metadata['graceperiod'])
+
+
+
 class TemplateTestCase(ModuleStoreTestCase):
 
     def test_template_cleanup(self):