diff --git a/tracks/app/controllers/todos_controller.rb b/tracks/app/controllers/todos_controller.rb
index bfd35d8f..36575c90 100644
--- a/tracks/app/controllers/todos_controller.rb
+++ b/tracks/app/controllers/todos_controller.rb
@@ -124,7 +124,7 @@ class TodosController < ApplicationController
     @original_item_context_id = @todo.context_id
     @original_item_project_id = @todo.project_id
     @original_item_was_deferred = @todo.deferred?
-    if params['todo']['project_id'].blank? && !params['project_name'].blank?
+    if params['todo']['project_id'].blank? && !params['project_name'].nil?
       if params['project_name'] == 'None'
         project = Project.null_object
       else
diff --git a/tracks/config/environments/test.rb b/tracks/config/environments/test.rb
index e7847b9d..5976d471 100644
--- a/tracks/config/environments/test.rb
+++ b/tracks/config/environments/test.rb
@@ -24,5 +24,5 @@ config.action_mailer.delivery_method = :test
 SALT = "change-me" unless defined?( SALT ).nil?
 
 config.after_initialize do
-  require 'test/selenium_helper'    
+  require File.expand_path(File.dirname(__FILE__) + "/../../test/selenium_helper")
 end
\ No newline at end of file
diff --git a/tracks/test/functional/todos_controller_test.rb b/tracks/test/functional/todos_controller_test.rb
index fcef3bbd..ed573b93 100644
--- a/tracks/test/functional/todos_controller_test.rb
+++ b/tracks/test/functional/todos_controller_test.rb
@@ -105,6 +105,14 @@ class TodosControllerTest < Test::Unit::TestCase
     actual = t.due
     assert_equal expected, actual, "Expected #{expected.to_s(:db)}, was #{actual.to_s(:db)}"
   end
+
+  def test_update_todos_with_blank_project_name
+    t = Todo.find(1)
+    @request.session['user_id'] = users(:admin_user).id
+    xhr :post, :update, :id => 1, :_source_view => 'todo', :project_name => '', "todo"=>{"id"=>"1", "notes"=>"", "description"=>"Call Warren Buffet to find out how much he makes per day", "due"=>"30/11/2006"}, "tag_list"=>"foo, bar"
+    t.reload
+    assert t.project.nil?
+  end
   
   def test_update_todo_tags_to_none
     t = Todo.find(1)
diff --git a/tracks/test/selenium/project_detail/change_todos_project_to_blank.rsel b/tracks/test/selenium/project_detail/change_todos_project_to_blank.rsel
new file mode 100644
index 00000000..08562814
--- /dev/null
+++ b/tracks/test/selenium/project_detail/change_todos_project_to_blank.rsel
@@ -0,0 +1,9 @@
+setup :fixtures => :all
+login :as => 'admin'
+open "/projects/Build_a_working_time_machine"
+click "edit_icon_todo_5"
+wait_for_element_present "show_from_todo_5"
+type "project_name_todo_5", ""
+click "//input[@value='Update']"
+wait_for_element_not_present "todo_5"
+assert_text 'badge_count', '1'
\ No newline at end of file