diff --git a/contracts/subscription/Cargo.toml b/contracts/subscription/Cargo.toml
new file mode 100644
index 00000000..17723c58
--- /dev/null
+++ b/contracts/subscription/Cargo.toml
@@ -0,0 +1,17 @@
+[package]
+name = "subscription"
+version = "0.1.0"
+edition = "2021"
+
+[lib]
+crate-type = ["cdylib", "rlib"]
+
+[dependencies]
+soroban-sdk = "22.0.10"
+
+[dev-dependencies]
+soroban-sdk = { version = "22.0.10", features = ["testutils"] }
+
+[profile.release]
+opt-level = "z"
+overflow-checks = true
diff --git a/contracts/subscription/src/lib.rs b/contracts/subscription/src/lib.rs
new file mode 100644
index 00000000..e7efca7d
--- /dev/null
+++ b/contracts/subscription/src/lib.rs
@@ -0,0 +1,107 @@
+#![cfg_attr(target_family = "wasm", no_std)]
+
+use soroban_sdk::{contract, contractimpl, contracttype, contracterror, token, Address, Env};
+
+#[contracterror]
+#[derive(Copy, Clone, Debug, PartialEq)]
+#[repr(u32)]
+pub enum Error {
+    AlreadySubscribed = 1,
+    NotSubscribed = 2,
+    PaymentNotDue = 3,
+}
+
+#[contracttype]
+#[derive(Clone, Debug, PartialEq)]
+pub struct Subscription {
+    pub subscriber: Address,
+    pub merchant: Address,
+    pub token: Address,
+    pub amount: i128,
+    pub interval: u64,
+    pub next_payment: u64,
+}
+
+#[contracttype]
+pub enum DataKey {
+    Sub(Address),
+}
+
+#[contract]
+pub struct SubscriptionContract;
+
+#[contractimpl]
+impl SubscriptionContract {
+    /// Create a new subscription. The first payment is due immediately (next_payment = now).
+    pub fn subscribe(
+        env: Env,
+        subscriber: Address,
+        merchant: Address,
+        token: Address,
+        amount: i128,
+        interval: u64,
+    ) -> Result<(), Error> {
+        subscriber.require_auth();
+
+        let key = DataKey::Sub(subscriber.clone());
+        if env.storage().persistent().has(&key) {
+            return Err(Error::AlreadySubscribed);
+        }
+
+        let now = env.ledger().timestamp();
+        let sub = Subscription {
+            subscriber,
+            merchant,
+            token,
+            amount,
+            interval,
+            next_payment: now,
+        };
+        env.storage().persistent().set(&key, &sub);
+        Ok(())
+    }
+
+    /// Execute a payment. Fails with PaymentNotDue if called before next_payment.
+    pub fn execute_payment(env: Env, subscriber: Address) -> Result<(), Error> {
+        let key = DataKey::Sub(subscriber.clone());
+        let mut sub: Subscription = env
+            .storage()
+            .persistent()
+            .get(&key)
+            .ok_or(Error::NotSubscribed)?;
+
+        let now = env.ledger().timestamp();
+        if now < sub.next_payment {
+            return Err(Error::PaymentNotDue);
+        }
+
+        let token_client = token::Client::new(&env, &sub.token);
+        token_client.transfer(&sub.subscriber, &sub.merchant, &sub.amount);
+
+        sub.next_payment = now + sub.interval;
+        env.storage().persistent().set(&key, &sub);
+        Ok(())
+    }
+
+    /// Cancel an active subscription.
+    pub fn cancel(env: Env, subscriber: Address) -> Result<(), Error> {
+        subscriber.require_auth();
+
+        let key = DataKey::Sub(subscriber);
+        if !env.storage().persistent().has(&key) {
+            return Err(Error::NotSubscribed);
+        }
+
+        env.storage().persistent().remove(&key);
+        Ok(())
+    }
+
+    /// Read the stored subscription record.
+    pub fn get_subscription(env: Env, subscriber: Address) -> Option<Subscription> {
+        env.storage()
+            .persistent()
+            .get(&DataKey::Sub(subscriber))
+    }
+}
+
+mod test;
diff --git a/contracts/subscription/src/test.rs b/contracts/subscription/src/test.rs
new file mode 100644
index 00000000..15178775
--- /dev/null
+++ b/contracts/subscription/src/test.rs
@@ -0,0 +1,108 @@
+#![cfg(test)]
+
+use super::*;
+use soroban_sdk::{
+    testutils::{Address as _, Ledger},
+    token, Address, Env,
+};
+
+fn setup() -> (Env, Address, Address, Address, Address) {
+    let env = Env::default();
+    env.mock_all_auths();
+
+    let contract_id = env.register_contract(None, SubscriptionContract);
+    let admin = Address::generate(&env);
+    let token_id = env.register_stellar_asset_contract_v2(admin.clone()).address();
+
+    let subscriber = Address::generate(&env);
+    let merchant = Address::generate(&env);
+
+    let token_admin = token::StellarAssetClient::new(&env, &token_id);
+    token_admin.mint(&subscriber, &10_000);
+
+    (env, contract_id, token_id, subscriber, merchant)
+}
+
+// ---------------------------------------------------------------------------
+// Issue #188 – execute_payment fails with PaymentNotDue before next_payment
+// ---------------------------------------------------------------------------
+#[test]
+fn test_execute_payment_before_due_time_returns_error() {
+    let (env, contract_id, token_id, subscriber, merchant) = setup();
+    let client = SubscriptionContractClient::new(&env, &contract_id);
+
+    env.ledger().with_mut(|l| l.timestamp = 1000);
+    client.subscribe(&subscriber, &merchant, &token_id, &100, &3600).unwrap();
+
+    env.ledger().with_mut(|l| l.timestamp = 1001);
+    client.execute_payment(&subscriber).unwrap();
+
+    // next_payment is now 1001 + 3600 = 4601; calling again at T=1001 must fail
+    let err = client.try_execute_payment(&subscriber).unwrap_err().unwrap();
+    assert_eq!(err, Error::PaymentNotDue);
+
+    let sub = client.get_subscription(&subscriber).unwrap();
+    assert_eq!(sub.next_payment, 4601);
+    assert_eq!(sub.amount, 100);
+}
+
+#[test]
+fn test_execute_payment_succeeds_at_due_time() {
+    let (env, contract_id, token_id, subscriber, merchant) = setup();
+    let client = SubscriptionContractClient::new(&env, &contract_id);
+
+    env.ledger().with_mut(|l| l.timestamp = 500);
+    client.subscribe(&subscriber, &merchant, &token_id, &200, &3600).unwrap();
+    client.execute_payment(&subscriber).unwrap();
+
+    let sub = client.get_subscription(&subscriber).unwrap();
+    assert_eq!(sub.next_payment, 500 + 3600);
+
+    let token_client = token::Client::new(&env, &token_id);
+    assert_eq!(token_client.balance(&merchant), 200);
+}
+
+// ---------------------------------------------------------------------------
+// Issue #189 – cancel then re-subscribe replaces the storage record cleanly
+// ---------------------------------------------------------------------------
+#[test]
+fn test_cancel_and_resubscribe_replaces_record() {
+    let (env, contract_id, token_id, subscriber, merchant) = setup();
+    let client = SubscriptionContractClient::new(&env, &contract_id);
+
+    env.ledger().with_mut(|l| l.timestamp = 0);
+    client.subscribe(&subscriber, &merchant, &token_id, &50, &600).unwrap();
+    assert_eq!(client.get_subscription(&subscriber).unwrap().amount, 50);
+
+    client.cancel(&subscriber).unwrap();
+    assert!(client.get_subscription(&subscriber).is_none());
+
+    env.ledger().with_mut(|l| l.timestamp = 100);
+    client.subscribe(&subscriber, &merchant, &token_id, &99, &1200).unwrap();
+
+    let sub = client.get_subscription(&subscriber).unwrap();
+    assert_eq!(sub.amount, 99);
+    assert_eq!(sub.interval, 1200);
+    assert_eq!(sub.next_payment, 100);
+}
+
+#[test]
+fn test_cancel_nonexistent_subscription_returns_error() {
+    let (env, contract_id, _, subscriber, _) = setup();
+    let client = SubscriptionContractClient::new(&env, &contract_id);
+
+    let err = client.try_cancel(&subscriber).unwrap_err().unwrap();
+    assert_eq!(err, Error::NotSubscribed);
+}
+
+#[test]
+fn test_double_subscribe_returns_error() {
+    let (env, contract_id, token_id, subscriber, merchant) = setup();
+    let client = SubscriptionContractClient::new(&env, &contract_id);
+
+    client.subscribe(&subscriber, &merchant, &token_id, &10, &100).unwrap();
+
+    let err = client.try_subscribe(&subscriber, &merchant, &token_id, &10, &100)
+        .unwrap_err().unwrap();
+    assert_eq!(err, Error::AlreadySubscribed);
+}