diff --git a/tests/test_strategy.py b/tests/test_strategy.py
new file mode 100644
index 0000000..f97f003
--- /dev/null
+++ b/tests/test_strategy.py
@@ -0,0 +1,68 @@
+from datetime import datetime, timedelta
+
+import pytest
+from hexbytes import HexBytes
+from twisted.logger import LogLevel, globalLogPublisher
+from web3.types import TxParams
+
+from atxm.exceptions import Fault, TransactionFaulted
+from atxm.strategies import TimeoutStrategy
+from atxm.tx import PendingTx
+
+
+def test_timeout_strategy(w3, mocker):
+    TIMEOUT = 600  # 10 mins
+    timeout_strategy = TimeoutStrategy(w3, timeout=TIMEOUT)
+
+    # None tx does not time out
+    with pytest.raises(RuntimeError):
+        assert timeout_strategy.execute(None)
+
+    # mock pending tx
+    pending_tx = mocker.Mock(spec=PendingTx)
+    pending_tx.txhash = HexBytes("0xdeadbeef")
+    params = mocker.Mock(spec=TxParams)
+    pending_tx.params = params
+    now = datetime.now()
+    pending_tx.created = now.timestamp()
+
+    # can't mock datetime, so instead use creation time to manipulate scenarios
+
+    # 1) tx just created a does not time out
+    for i in range(3):
+        assert timeout_strategy.execute(pending_tx) == params
+
+    # 2) remaining time is < warn factor; still doesn't time out but we warn about it
+    pending_tx.created = (
+        now - timedelta(seconds=(TIMEOUT * (1 - timeout_strategy._WARN_FACTOR) + 1))
+    ).timestamp()
+
+    warnings = []
+
+    def warning_trapper(event):
+        if event["log_level"] == LogLevel.warn:
+            warnings.append(event)
+
+    globalLogPublisher.addObserver(warning_trapper)
+    assert timeout_strategy.execute(pending_tx) == params
+    globalLogPublisher.removeObserver(warning_trapper)
+
+    assert len(warnings) == 1
+    warning = warnings[0]["log_format"]
+    assert (
+        f"[pending_timeout] Transaction {pending_tx.txhash.hex()} will timeout in"
+        in warning
+    )
+
+    # 3) close to timeout but not quite (5s short)
+    pending_tx.created = (now - timedelta(seconds=(TIMEOUT - 5))).timestamp()
+    assert timeout_strategy.execute(pending_tx) == params
+
+    # 4) timeout
+    pending_tx.created = (now - timedelta(seconds=(TIMEOUT + 1))).timestamp()
+    with pytest.raises(TransactionFaulted) as exc_info:
+        timeout_strategy.execute(pending_tx)
+    e = exc_info.value
+    e.tx = pending_tx
+    e.fault = Fault.TIMEOUT
+    e.message = "Transaction has timed out"