diff --git a/pkg/cli/run.go b/pkg/cli/run.go
index 99c15335f..147502f35 100644
--- a/pkg/cli/run.go
+++ b/pkg/cli/run.go
@@ -271,7 +271,10 @@ func (s *Run) Run(cmd *cobra.Command, args []string) error {
 		if s.Interactive {
 			return fmt.Errorf("cannot use --update/-u or --replace/-r with --dev/-i")
 		}
-		return updateHelper(cmd, args, s, c, isDir, cwd)
+		//if app does not exist but --update/--replace flag is used create app instead
+		if existingApp != nil {
+			return updateHelper(cmd, args, s, c, isDir, cwd)
+		}
 	}
 
 	if s.Interactive {
diff --git a/pkg/cli/run_test.go b/pkg/cli/run_test.go
index 64823e286..7ff1663f3 100644
--- a/pkg/cli/run_test.go
+++ b/pkg/cli/run_test.go
@@ -285,8 +285,6 @@ func TestRun(t *testing.T) {
 							Spec:       apiv1.InfoSpec{},
 						},
 					}, nil)
-				f.EXPECT().ImageDetails(gomock.Any(), gomock.Any(), gomock.Any()).Return(
-					nil, fmt.Errorf("error: app image-dne does not exist"))
 			},
 		},
 		{