diff --git a/poetry/core/factory.py b/poetry/core/factory.py
index 23e02f8f2..d248dbb74 100644
--- a/poetry/core/factory.py
+++ b/poetry/core/factory.py
@@ -27,7 +27,9 @@ class Factory(object):
     Factory class to create various elements needed by Poetry.
     """
 
-    def create_poetry(self, cwd=None, with_dev=True):  # type: (Optional[Path]. bool) -> Poetry
+    def create_poetry(
+        self, cwd=None, with_dev=True
+    ):  # type: (Optional[Path]. bool) -> Poetry
         poetry_file = self.locate(cwd)
         local_config = PyProjectTOML(path=poetry_file).poetry_config
 
diff --git a/tests/masonry/builders/fixtures/with_bad_path_dep/pyproject.toml b/tests/masonry/builders/fixtures/with_bad_path_dep/pyproject.toml
new file mode 100644
index 000000000..3c7edf13a
--- /dev/null
+++ b/tests/masonry/builders/fixtures/with_bad_path_dep/pyproject.toml
@@ -0,0 +1,9 @@
+[tool.poetry]
+name = "with_bad_path_dep"
+version = "1.2.3"
+description = "Some description."
+authors = ["Awesome Hacker <awesome@hacker.io>"]
+
+[tool.poetry.dependencies]
+python = "^3.6"
+bogus = { path = "../only/in/dev", develop = true }
diff --git a/tests/json/__init__.py b/tests/masonry/builders/fixtures/with_bad_path_dep/with_bad_path_dep/__init__.py
similarity index 100%
rename from tests/json/__init__.py
rename to tests/masonry/builders/fixtures/with_bad_path_dep/with_bad_path_dep/__init__.py
diff --git a/tests/masonry/builders/fixtures/with_bad_path_dev_dep/pyproject.toml b/tests/masonry/builders/fixtures/with_bad_path_dev_dep/pyproject.toml
new file mode 100644
index 000000000..921d93af5
--- /dev/null
+++ b/tests/masonry/builders/fixtures/with_bad_path_dev_dep/pyproject.toml
@@ -0,0 +1,11 @@
+[tool.poetry]
+name = "with_bad_path_dev_dep"
+version = "1.2.3"
+description = "Some description."
+authors = ["Awesome Hacker <awesome@hacker.io>"]
+
+[tool.poetry.dependencies]
+python = "^3.6"
+
+[tool.poetry.dev-dependencies]
+bogus = { path = "../only/in/dev", develop = true }
diff --git a/tests/masonry/builders/fixtures/with_bad_path_dev_dep/with_bad_path_dev_dep/__init__.py b/tests/masonry/builders/fixtures/with_bad_path_dev_dep/with_bad_path_dev_dep/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/masonry/test_api.py b/tests/masonry/test_api.py
index 9f8cfc95c..7f0eb59d4 100644
--- a/tests/masonry/test_api.py
+++ b/tests/masonry/test_api.py
@@ -65,6 +65,21 @@ def test_build_wheel_with_include():
         )
 
 
+def test_build_wheel_with_bad_path_dev_dep_succeeds():
+    with temporary_directory() as tmp_dir, cwd(
+        os.path.join(fixtures, "with_bad_path_dev_dep")
+    ):
+        api.build_wheel(tmp_dir)
+
+
+def test_build_wheel_with_bad_path_dep_fails():
+    with pytest.raises(ValueError) as err, temporary_directory() as tmp_dir, cwd(
+        os.path.join(fixtures, "with_bad_path_dep")
+    ):
+        api.build_wheel(tmp_dir)
+    assert "../only/in/dev" in str(err.value)
+
+
 @pytest.mark.skipif(
     sys.platform == "win32"
     and sys.version_info <= (3, 6)
@@ -101,6 +116,21 @@ def test_build_sdist_with_include():
         )
 
 
+def test_build_sdist_with_bad_path_dev_dep_succeeds():
+    with temporary_directory() as tmp_dir, cwd(
+        os.path.join(fixtures, "with_bad_path_dev_dep")
+    ):
+        api.build_sdist(tmp_dir)
+
+
+def test_build_sdist_with_bad_path_dep_fails():
+    with pytest.raises(ValueError) as err, temporary_directory() as tmp_dir, cwd(
+        os.path.join(fixtures, "with_bad_path_dep")
+    ):
+        api.build_sdist(tmp_dir)
+    assert "../only/in/dev" in str(err.value)
+
+
 def test_prepare_metadata_for_build_wheel():
     entry_points = """\
 [console_scripts]
@@ -170,3 +200,18 @@ def test_prepare_metadata_for_build_wheel():
 
         with (dist_info / "METADATA").open(encoding="utf-8") as f:
             assert metadata == decode(f.read())
+
+
+def test_prepare_metadata_for_build_wheel_with_bad_path_dev_dep_succeeds():
+    with temporary_directory() as tmp_dir, cwd(
+        os.path.join(fixtures, "with_bad_path_dev_dep")
+    ):
+        api.prepare_metadata_for_build_wheel(tmp_dir)
+
+
+def test_prepare_metadata_for_build_wheel_with_bad_path_dep_succeeds():
+    with pytest.raises(ValueError) as err, temporary_directory() as tmp_dir, cwd(
+        os.path.join(fixtures, "with_bad_path_dep")
+    ):
+        api.prepare_metadata_for_build_wheel(tmp_dir)
+    assert "../only/in/dev" in str(err.value)
diff --git a/tests/test_factory.py b/tests/test_factory.py
index 72c2d5abc..0703d9f12 100644
--- a/tests/test_factory.py
+++ b/tests/test_factory.py
@@ -9,7 +9,6 @@
 from poetry.core.utils._compat import PY2
 from poetry.core.utils._compat import Path
 
-
 fixtures_dir = Path(__file__).parent / "fixtures"
 
 
@@ -201,14 +200,19 @@ def test_create_poetry_fails_on_invalid_configuration():
     assert expected == str(e.value)
 
 
-def test_create_poetry_with_invalid_dev_dependencies():
+def test_create_poetry_omits_dev_dependencies_iff_with_dev_is_false():
+    poetry = Factory().create_poetry(fixtures_dir / "sample_project", with_dev=False)
+    assert not any(r for r in poetry.package.dev_requires if "pytest" in str(r))
+
+    poetry = Factory().create_poetry(fixtures_dir / "sample_project")
+    assert any(r for r in poetry.package.dev_requires if "pytest" in str(r))
+
+
+def test_create_poetry_fails_with_invalid_dev_dependencies_iff_with_dev_is_true():
     with pytest.raises(ValueError) as err:
         Factory().create_poetry(fixtures_dir / "project_with_invalid_dev_deps")
     assert "../mylib does not exist" in str(err.value)
 
-
-def test_create_poetry_skipping_dev_dependencies():
-    poetry = Factory().create_poetry(
+    Factory().create_poetry(
         fixtures_dir / "project_with_invalid_dev_deps", with_dev=False
     )
-    assert not poetry.package.dev_requires