diff --git a/src/cmd/build.rs b/src/cmd/build.rs
index 14c75623c3c1ef4c491dc3d0d42725c563e1d4aa..fac09452dce6ba953a225b5b368c13ea70d24055 100644
--- a/src/cmd/build.rs
+++ b/src/cmd/build.rs
@@ -430,6 +430,36 @@ fn do_optimization(
     Ok(())
 }
 
+/// Asserts that the contract's dependencies are compatible to the ones used in ink!.
+///
+/// This function utilizes `cargo tree`, which takes semver into consideration.
+///
+/// Hence this function only returns an `Err` if it is a proper mismatch according
+/// to semantic versioning. This means that either:
+///     - the major version mismatches, differences in the minor/patch version
+///       are not considered incompatible.
+///     - or if the version starts with zero (i.e. `0.y.z`) a mismatch in the minor
+///       version is already considered incompatible.
+fn assert_compatible_ink_dependencies(
+    manifest_path: &ManifestPath,
+    verbosity: Verbosity,
+) -> Result<()> {
+    for dependency in ["parity-scale-codec", "scale-info"].iter() {
+        let args = ["-i", dependency, "--duplicates"];
+        let _ = util::invoke_cargo("tree", &args, manifest_path.directory(), verbosity).map_err(
+            |_| {
+                anyhow::anyhow!(
+                    "Mismatching versions of `{}` were found!\n\
+                     Please ensure that your contract and your ink! dependencies use a compatible \
+                     version of this package.",
+                    dependency
+                )
+            },
+        )?;
+    }
+    Ok(())
+}
+
 /// Executes build of the smart-contract which produces a wasm binary that is ready for deploying.
 ///
 /// It does so by invoking `cargo build` and then post processing the final binary.
@@ -440,7 +470,9 @@ pub(crate) fn execute(
     unstable_flags: UnstableFlags,
     optimization_passes: OptimizationPasses,
 ) -> Result<BuildResult> {
-    let crate_metadata = CrateMetadata::collect(manifest_path)?;
+    let crate_metadata = CrateMetadata::collect(&manifest_path)?;
+
+    assert_compatible_ink_dependencies(&manifest_path, verbosity)?;
 
     let build = || -> Result<OptimizationResult> {
         maybe_println!(
@@ -506,6 +538,7 @@ pub(crate) fn execute(
 #[cfg(feature = "test-ci-only")]
 #[cfg(test)]
 mod tests_ci_only {
+    use super::assert_compatible_ink_dependencies;
     use crate::{
         cmd::{self, BuildCommand},
         util::tests::with_tmp_dir,
@@ -678,4 +711,50 @@ mod tests_ci_only {
             Ok(())
         })
     }
+
+    #[test]
+    fn project_template_dependencies_must_be_ink_compatible() {
+        with_tmp_dir(|path| {
+            // given
+            cmd::new::execute("new_project", Some(path)).expect("new project creation failed");
+            let cargo_toml_path = path.join("new_project").join("Cargo.toml");
+            let manifest_path =
+                ManifestPath::new(&cargo_toml_path).expect("manifest path creation failed");
+
+            // when
+            let res = assert_compatible_ink_dependencies(&manifest_path, Verbosity::Default);
+
+            // then
+            assert!(res.is_ok());
+            Ok(())
+        })
+    }
+
+    #[test]
+    fn detect_mismatching_parity_scale_codec_dependencies() {
+        with_tmp_dir(|path| {
+            // given
+            cmd::new::execute("new_project", Some(path)).expect("new project creation failed");
+            let cargo_toml_path = path.join("new_project").join("Cargo.toml");
+            let manifest_path =
+                ManifestPath::new(&cargo_toml_path).expect("manifest path creation failed");
+
+            // at the time of writing this test ink! already uses `parity-scale-codec`
+            // in a version > 2, hence 1 is an incompatible version.
+            let mut manifest = Manifest::new(manifest_path.clone())?;
+            manifest
+                .set_dependency_version("scale", "1.0.0")
+                .expect("setting `scale` version failed");
+            manifest
+                .write(&manifest_path)
+                .expect("writing manifest failed");
+
+            // when
+            let res = assert_compatible_ink_dependencies(&manifest_path, Verbosity::Default);
+
+            // then
+            assert!(res.is_err());
+            Ok(())
+        })
+    }
 }
diff --git a/src/workspace/manifest.rs b/src/workspace/manifest.rs
index ce44c030cd9ef7707c87cf564d1342fcaa04b9f2..5a439926bb65c43cf82319afdc7212b45c1fb685 100644
--- a/src/workspace/manifest.rs
+++ b/src/workspace/manifest.rs
@@ -204,6 +204,24 @@ impl Manifest {
             ))
     }
 
+    /// Set the dependency version of `package` to `version`.
+    #[cfg(test)]
+    pub fn set_dependency_version(
+        &mut self,
+        dependency: &str,
+        version: &str,
+    ) -> Result<Option<toml::Value>> {
+        Ok(self
+            .toml
+            .get_mut("dependencies")
+            .ok_or_else(|| anyhow::anyhow!("[dependencies] section not found"))?
+            .get_mut(dependency)
+            .ok_or_else(|| anyhow::anyhow!("{} dependency not found", dependency))?
+            .as_table_mut()
+            .ok_or_else(|| anyhow::anyhow!("{} dependency should be a table", dependency))?
+            .insert("version".into(), value::Value::String(version.into())))
+    }
+
     /// Set `[profile.release]` lto flag
     pub fn with_profile_release_lto(&mut self, enabled: bool) -> Result<&mut Self> {
         let lto = self