diff --git a/test/bin/check-test-install-error-stop.sh b/test/bin/check-test-install-error-stop.sh
index 26c98e5..61f2700 100755
--- a/test/bin/check-test-install-error-stop.sh
+++ b/test/bin/check-test-install-error-stop.sh
@@ -12,8 +12,13 @@
 # net so its absence is caught at build time instead of discovered the hard
 # way (issue #97).
 #
-# A file passes if it either sets ON_ERROR_STOP itself, or sources
-# test/pgxntool/psql.sql (which already sets it, among other things).
+# A file passes if it explicitly turns ON_ERROR_STOP on at some point --
+# directly (`\set ON_ERROR_STOP on`/true/1/yes) or by sourcing
+# test/pgxntool/psql.sql (which already turns it on, among other things). A
+# later explicit turn-off doesn't undo an earlier turn-on. A file that only
+# ever turns it off, or never mentions it at all, fails: a bare substring
+# match on "ON_ERROR_STOP" would wrongly pass a file that only turns it off,
+# so each `\set` needs its value read, in file order.
 #
 # Usage: check-test-install-error-stop.sh <testdir>
 
@@ -30,13 +35,30 @@ testdir="$1"
 install_dir="$testdir/install"
 missing=()
 
+# Scans $1 in file order, tracking whether ON_ERROR_STOP has been explicitly
+# turned on. Succeeds (exit 0) once an on-value is seen; a later off-value
+# doesn't reset that. Sourcing psql.sql counts as turning it on, wherever it
+# occurs in the file.
+file_turns_error_stop_on() {
+  local f="$1" line value
+  while IFS= read -r line; do
+    if [[ "$line" =~ \\ir?[[:space:]]+.*psql\.sql ]]; then
+      return 0
+    fi
+    if [[ "$line" =~ \\set[[:space:]]+ON_ERROR_STOP[[:space:]]+([^[:space:]]+) ]]; then
+      value="${BASH_REMATCH[1],,}"
+      case "$value" in
+        on|true|1|yes) return 0 ;;
+      esac
+    fi
+  done < "$f"
+  return 1
+}
+
 for f in "$install_dir"/*.sql; do
   [ -f "$f" ] || continue
 
-  if grep -q 'ON_ERROR_STOP' "$f"; then
-    continue
-  fi
-  if grep -qE '\\ir? +.*psql\.sql' "$f"; then
+  if file_turns_error_stop_on "$f"; then
     continue
   fi