diff --git a/api/src/owner_rpc_v2.rs b/api/src/owner_rpc_v2.rs
index 4f8ef964a..3c611a7ff 100644
--- a/api/src/owner_rpc_v2.rs
+++ b/api/src/owner_rpc_v2.rs
@@ -717,6 +717,36 @@ pub trait OwnerRpcV2: Sync + Send {
 	}
 	# "#
 	# ,false, 4, false, false, false, false, false);
+	#
+	# // Testing low 'max_outputs' value. Expecting to get error that slate is too large
+	# grin_wallet_api::doctest_helper_json_rpc_owner_assert_response!(
+	# r#"
+	{
+		"jsonrpc": "2.0",
+		"method": "init_send_tx",
+		"params": {
+			"args": {
+				"amount": "20000000",
+				"minimum_confirmations": 2,
+				"max_outputs": 2
+			}
+		},
+		"id": 1
+	}
+	# "#
+	# ,
+	# r#"
+	{
+	  "id": 1,
+	  "jsonrpc": "2.0",
+	  "result": {
+		"Err": {
+		  "TooLargeSlate": 2
+		}
+	  }
+	}
+	# "#
+	# ,false, 4, false, false, false, false, false);
 	```
 	*/
 
diff --git a/libwallet/src/internal/selection.rs b/libwallet/src/internal/selection.rs
index fbceed20d..ef839d7ab 100644
--- a/libwallet/src/internal/selection.rs
+++ b/libwallet/src/internal/selection.rs
@@ -864,10 +864,12 @@ where
 	// amount, the wallet should allow going over it to satisfy what the user
 	// wants to send. So the wallet considers max_outputs more of a soft limit.
 	if eligible.len() > max_outputs {
-		for window in eligible.windows(max_outputs) {
-			let windowed_eligibles = window.to_vec();
-			if let Some(outputs) = select_from(amount, select_all, windowed_eligibles) {
-				return (max_available, outputs);
+		if max_outputs > 0 {
+			for window in eligible.windows(max_outputs) {
+				let windowed_eligibles = window.to_vec();
+				if let Some(outputs) = select_from(amount, select_all, windowed_eligibles) {
+					return (max_available, outputs);
+				}
 			}
 		}
 		// Not exist in any window of which total amount >= amount.