diff --git a/CHANGELOG.md b/CHANGELOG.md
index a123c2a44d..50aabcb8e9 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,6 +1,59 @@
 Change log
 ==========
 
+1.5.1 (2015-11-12)
+------------------
+
+-   Add the `--force-rm` option to `build`.
+
+-   Add the `ulimit` option for services in the Compose file.
+
+-   Fixed a bug where `up` would error with "service needs to be built" if
+    a service changed from using `image` to using `build`.
+
+-   Fixed a bug that would cause incorrect output of parallel operations
+    on some terminals.
+
+-   Fixed a bug that prevented a container from being recreated when the
+    mode of a `volumes_from` was changed.
+
+-   Fixed a regression in 1.5.0 where non-utf-8 unicode characters would cause
+    `up` or `logs` to crash.
+
+-   Fixed a regression in 1.5.0 where Compose would use a success exit status
+    code when a command fails due to an HTTP timeout communicating with the
+    docker daemon.
+
+-   Fixed a regression in 1.5.0 where `name` was being accepted as a valid
+    service option which would override the actual name of the service.
+
+-   When using `--x-networking` Compose no longer sets the hostname to the
+    container name.
+
+-   When using `--x-networking` Compose will only create the default network
+    if at least one container is using the network.
+
+-   When printings logs during `up` or `logs`, flush the output buffer after
+    each line to prevent buffering issues from hideing logs.
+
+-   Recreate a container if one of it's dependencies is being created.
+    Previously a container was only recreated if it's dependencies already
+    existed, but were being recreated as well.
+
+-   Add a warning when a `volume` in the Compose file is being ignored
+    and masked by a container volume from a previous container.
+
+-   Improve the output of `pull` when run without a tty.
+
+-   When using multiple Compose files, validate each before attempting to merge
+    them together. Previously invalid files would result in not helpful errors.
+
+-   Allow dashes in keys in the `environment` service option.
+
+-   Improve validation error messages by including the filename as part of the
+    error message.
+
+
 1.5.0 (2015-11-03)
 ------------------
 
diff --git a/compose/__init__.py b/compose/__init__.py
index 2b8d5e72b2..5f2b332afb 100644
--- a/compose/__init__.py
+++ b/compose/__init__.py
@@ -1,3 +1,3 @@
 from __future__ import unicode_literals
 
-__version__ = '1.5.0'
+__version__ = '1.5.1'
diff --git a/compose/cli/log_printer.py b/compose/cli/log_printer.py
index 66920726ce..864657a4c6 100644
--- a/compose/cli/log_printer.py
+++ b/compose/cli/log_printer.py
@@ -26,6 +26,7 @@ class LogPrinter(object):
         generators = list(self._make_log_generators(self.monochrome, prefix_width))
         for line in Multiplexer(generators).loop():
             self.output.write(line)
+            self.output.flush()
 
     def _make_log_generators(self, monochrome, prefix_width):
         def no_color(text):
diff --git a/compose/cli/main.py b/compose/cli/main.py
index b54b307ef2..806926d845 100644
--- a/compose/cli/main.py
+++ b/compose/cli/main.py
@@ -13,12 +13,12 @@ from requests.exceptions import ReadTimeout
 
 from .. import __version__
 from .. import legacy
+from ..config import ConfigurationError
 from ..config import parse_environment
 from ..const import DEFAULT_TIMEOUT
 from ..const import HTTP_TIMEOUT
 from ..const import IS_WINDOWS_PLATFORM
 from ..progress_stream import StreamOutputError
-from ..project import ConfigurationError
 from ..project import NoSuchService
 from ..service import BuildError
 from ..service import ConvergenceStrategy
@@ -80,6 +80,7 @@ def main():
             "If you encounter this issue regularly because of slow network conditions, consider setting "
             "COMPOSE_HTTP_TIMEOUT to a higher value (current value: %s)." % HTTP_TIMEOUT
         )
+        sys.exit(1)
 
 
 def setup_logging():
@@ -180,12 +181,15 @@ class TopLevelCommand(DocoptCommand):
         Usage: build [options] [SERVICE...]
 
         Options:
+            --force-rm  Always remove intermediate containers.
             --no-cache  Do not use cache when building the image.
             --pull      Always attempt to pull a newer version of the image.
         """
-        no_cache = bool(options.get('--no-cache', False))
-        pull = bool(options.get('--pull', False))
-        project.build(service_names=options['SERVICE'], no_cache=no_cache, pull=pull)
+        project.build(
+            service_names=options['SERVICE'],
+            no_cache=bool(options.get('--no-cache', False)),
+            pull=bool(options.get('--pull', False)),
+            force_rm=bool(options.get('--force-rm', False)))
 
     def help(self, project, options):
         """
@@ -448,7 +452,7 @@ class TopLevelCommand(DocoptCommand):
             raise e
 
         if detach:
-            service.start_container(container)
+            container.start()
             print(container.name)
         else:
             dockerpty.start(project.client, container.id, interactive=not options['-T'])
diff --git a/compose/config/__init__.py b/compose/config/__init__.py
index de6f10c949..ec607e087e 100644
--- a/compose/config/__init__.py
+++ b/compose/config/__init__.py
@@ -1,5 +1,4 @@
 # flake8: noqa
-from .config import ConfigDetails
 from .config import ConfigurationError
 from .config import DOCKER_CONFIG_KEYS
 from .config import find
diff --git a/compose/config/config.py b/compose/config/config.py
index 21549e9b34..201266208a 100644
--- a/compose/config/config.py
+++ b/compose/config/config.py
@@ -13,7 +13,6 @@ from .errors import ConfigurationError
 from .interpolation import interpolate_environment_variables
 from .validation import validate_against_fields_schema
 from .validation import validate_against_service_schema
-from .validation import validate_extended_service_exists
 from .validation import validate_extends_file_path
 from .validation import validate_top_level_object
 
@@ -66,7 +65,6 @@ ALLOWED_KEYS = DOCKER_CONFIG_KEYS + [
     'dockerfile',
     'expose',
     'external_links',
-    'name',
 ]
 
 
@@ -99,6 +97,24 @@ class ConfigFile(namedtuple('_ConfigFile', 'filename config')):
     :type  config: :class:`dict`
     """
 
+    @classmethod
+    def from_filename(cls, filename):
+        return cls(filename, load_yaml(filename))
+
+
+class ServiceConfig(namedtuple('_ServiceConfig', 'working_dir filename name config')):
+
+    @classmethod
+    def with_abs_paths(cls, working_dir, filename, name, config):
+        if not working_dir:
+            raise ValueError("No working_dir for ServiceConfig.")
+
+        return cls(
+            os.path.abspath(working_dir),
+            os.path.abspath(filename) if filename else filename,
+            name,
+            config)
+
 
 def find(base_dir, filenames):
     if filenames == ['-']:
@@ -114,7 +130,7 @@ def find(base_dir, filenames):
     log.debug("Using configuration files: {}".format(",".join(filenames)))
     return ConfigDetails(
         os.path.dirname(filenames[0]),
-        [ConfigFile(f, load_yaml(f)) for f in filenames])
+        [ConfigFile.from_filename(f) for f in filenames])
 
 
 def get_default_config_files(base_dir):
@@ -174,21 +190,22 @@ def load(config_details):
     """
 
     def build_service(filename, service_name, service_dict):
-        loader = ServiceLoader(
+        service_config = ServiceConfig.with_abs_paths(
             config_details.working_dir,
             filename,
             service_name,
             service_dict)
-        service_dict = loader.make_service_dict()
+        resolver = ServiceExtendsResolver(service_config)
+        service_dict = process_service(resolver.run())
+        validate_against_service_schema(service_dict, service_config.name)
         validate_paths(service_dict)
+        service_dict['name'] = service_config.name
         return service_dict
 
-    def load_file(filename, config):
-        processed_config = interpolate_environment_variables(config)
-        validate_against_fields_schema(processed_config)
+    def build_services(config_file):
         return [
-            build_service(filename, name, service_config)
-            for name, service_config in processed_config.items()
+            build_service(config_file.filename, name, service_dict)
+            for name, service_dict in config_file.config.items()
         ]
 
     def merge_services(base, override):
@@ -200,159 +217,163 @@ def load(config_details):
             for name in all_service_names
         }
 
-    config_file = config_details.config_files[0]
-    validate_top_level_object(config_file.config)
+    config_file = process_config_file(config_details.config_files[0])
     for next_file in config_details.config_files[1:]:
-        validate_top_level_object(next_file.config)
+        next_file = process_config_file(next_file)
 
-        config_file = ConfigFile(
-            config_file.filename,
-            merge_services(config_file.config, next_file.config))
+        config = merge_services(config_file.config, next_file.config)
+        config_file = config_file._replace(config=config)
 
-    return load_file(config_file.filename, config_file.config)
+    return build_services(config_file)
 
 
-class ServiceLoader(object):
-    def __init__(self, working_dir, filename, service_name, service_dict, already_seen=None):
-        if working_dir is None:
-            raise Exception("No working_dir passed to ServiceLoader()")
+def process_config_file(config_file, service_name=None):
+    validate_top_level_object(config_file)
+    processed_config = interpolate_environment_variables(config_file.config)
+    validate_against_fields_schema(processed_config, config_file.filename)
 
-        self.working_dir = os.path.abspath(working_dir)
+    if service_name and service_name not in processed_config:
+        raise ConfigurationError(
+            "Cannot extend service '{}' in {}: Service not found".format(
+                service_name, config_file.filename))
 
-        if filename:
-            self.filename = os.path.abspath(filename)
-        else:
-            self.filename = filename
+    return config_file._replace(config=processed_config)
+
+
+class ServiceExtendsResolver(object):
+    def __init__(self, service_config, already_seen=None):
+        self.service_config = service_config
+        self.working_dir = service_config.working_dir
         self.already_seen = already_seen or []
-        self.service_dict = service_dict.copy()
-        self.service_name = service_name
-        self.service_dict['name'] = service_name
 
-    def detect_cycle(self, name):
-        if self.signature(name) in self.already_seen:
-            raise CircularReference(self.already_seen + [self.signature(name)])
+    @property
+    def signature(self):
+        return self.service_config.filename, self.service_config.name
 
-    def make_service_dict(self):
-        self.resolve_environment()
-        if 'extends' in self.service_dict:
-            self.validate_and_construct_extends()
-            self.service_dict = self.resolve_extends()
+    def detect_cycle(self):
+        if self.signature in self.already_seen:
+            raise CircularReference(self.already_seen + [self.signature])
 
-        if not self.already_seen:
-            validate_against_service_schema(self.service_dict, self.service_name)
+    def run(self):
+        self.detect_cycle()
 
-        return process_container_options(self.service_dict, working_dir=self.working_dir)
+        service_dict = dict(self.service_config.config)
+        env = resolve_environment(self.working_dir, self.service_config.config)
+        if env:
+            service_dict['environment'] = env
+            service_dict.pop('env_file', None)
 
-    def resolve_environment(self):
-        """
-        Unpack any environment variables from an env_file, if set.
-        Interpolate environment values if set.
-        """
-        if 'environment' not in self.service_dict and 'env_file' not in self.service_dict:
-            return
+        if 'extends' in service_dict:
+            service_dict = self.resolve_extends(*self.validate_and_construct_extends())
 
-        env = {}
-
-        if 'env_file' in self.service_dict:
-            for f in get_env_files(self.service_dict, working_dir=self.working_dir):
-                env.update(env_vars_from_file(f))
-            del self.service_dict['env_file']
-
-        env.update(parse_environment(self.service_dict.get('environment')))
-        env = dict(resolve_env_var(k, v) for k, v in six.iteritems(env))
-
-        self.service_dict['environment'] = env
+        return self.service_config._replace(config=service_dict)
 
     def validate_and_construct_extends(self):
-        extends = self.service_dict['extends']
+        extends = self.service_config.config['extends']
         if not isinstance(extends, dict):
             extends = {'service': extends}
 
-        validate_extends_file_path(
-            self.service_name,
-            extends,
-            self.filename
-        )
-        self.extended_config_path = self.get_extended_config_path(extends)
-        self.extended_service_name = extends['service']
+        config_path = self.get_extended_config_path(extends)
+        service_name = extends['service']
 
-        config = load_yaml(self.extended_config_path)
-        validate_top_level_object(config)
-        full_extended_config = interpolate_environment_variables(config)
+        extended_file = process_config_file(
+            ConfigFile.from_filename(config_path),
+            service_name=service_name)
+        service_config = extended_file.config[service_name]
+        return config_path, service_config, service_name
 
-        validate_extended_service_exists(
-            self.extended_service_name,
-            full_extended_config,
-            self.extended_config_path
-        )
-        validate_against_fields_schema(full_extended_config)
+    def resolve_extends(self, extended_config_path, service_dict, service_name):
+        resolver = ServiceExtendsResolver(
+            ServiceConfig.with_abs_paths(
+                os.path.dirname(extended_config_path),
+                extended_config_path,
+                service_name,
+                service_dict),
+            already_seen=self.already_seen + [self.signature])
 
-        self.extended_config = full_extended_config[self.extended_service_name]
-
-    def resolve_extends(self):
-        other_working_dir = os.path.dirname(self.extended_config_path)
-        other_already_seen = self.already_seen + [self.signature(self.service_name)]
-
-        other_loader = ServiceLoader(
-            working_dir=other_working_dir,
-            filename=self.extended_config_path,
-            service_name=self.service_name,
-            service_dict=self.extended_config,
-            already_seen=other_already_seen,
-        )
-
-        other_loader.detect_cycle(self.extended_service_name)
-        other_service_dict = other_loader.make_service_dict()
+        service_config = resolver.run()
+        other_service_dict = process_service(service_config)
         validate_extended_service_dict(
             other_service_dict,
-            filename=self.extended_config_path,
-            service=self.extended_service_name,
+            extended_config_path,
+            service_name,
         )
 
-        return merge_service_dicts(other_service_dict, self.service_dict)
+        return merge_service_dicts(other_service_dict, self.service_config.config)
 
     def get_extended_config_path(self, extends_options):
-        """
-        Service we are extending either has a value for 'file' set, which we
+        """Service we are extending either has a value for 'file' set, which we
         need to obtain a full path too or we are extending from a service
         defined in our own file.
         """
+        filename = self.service_config.filename
+        validate_extends_file_path(
+            self.service_config.name,
+            extends_options,
+            filename)
         if 'file' in extends_options:
-            extends_from_filename = extends_options['file']
-            return expand_path(self.working_dir, extends_from_filename)
+            return expand_path(self.working_dir, extends_options['file'])
+        return filename
 
-        return self.filename
 
-    def signature(self, name):
-        return (self.filename, name)
+def resolve_environment(working_dir, service_dict):
+    """Unpack any environment variables from an env_file, if set.
+    Interpolate environment values if set.
+    """
+    if 'environment' not in service_dict and 'env_file' not in service_dict:
+        return {}
+
+    env = {}
+    if 'env_file' in service_dict:
+        for env_file in get_env_files(working_dir, service_dict):
+            env.update(env_vars_from_file(env_file))
+
+    env.update(parse_environment(service_dict.get('environment')))
+    return dict(resolve_env_var(k, v) for k, v in six.iteritems(env))
 
 
 def validate_extended_service_dict(service_dict, filename, service):
     error_prefix = "Cannot extend service '%s' in %s:" % (service, filename)
 
     if 'links' in service_dict:
-        raise ConfigurationError("%s services with 'links' cannot be extended" % error_prefix)
+        raise ConfigurationError(
+            "%s services with 'links' cannot be extended" % error_prefix)
 
     if 'volumes_from' in service_dict:
-        raise ConfigurationError("%s services with 'volumes_from' cannot be extended" % error_prefix)
+        raise ConfigurationError(
+            "%s services with 'volumes_from' cannot be extended" % error_prefix)
 
     if 'net' in service_dict:
         if get_service_name_from_net(service_dict['net']) is not None:
-            raise ConfigurationError("%s services with 'net: container' cannot be extended" % error_prefix)
+            raise ConfigurationError(
+                "%s services with 'net: container' cannot be extended" % error_prefix)
 
 
-def process_container_options(service_dict, working_dir=None):
-    service_dict = service_dict.copy()
+def validate_ulimits(ulimit_config):
+    for limit_name, soft_hard_values in six.iteritems(ulimit_config):
+        if isinstance(soft_hard_values, dict):
+            if not soft_hard_values['soft'] <= soft_hard_values['hard']:
+                raise ConfigurationError(
+                    "ulimit_config \"{}\" cannot contain a 'soft' value higher "
+                    "than 'hard' value".format(ulimit_config))
+
+
+def process_service(service_config):
+    working_dir = service_config.working_dir
+    service_dict = dict(service_config.config)
 
     if 'volumes' in service_dict and service_dict.get('volume_driver') is None:
-        service_dict['volumes'] = resolve_volume_paths(service_dict, working_dir=working_dir)
+        service_dict['volumes'] = resolve_volume_paths(working_dir, service_dict)
 
     if 'build' in service_dict:
-        service_dict['build'] = resolve_build_path(service_dict['build'], working_dir=working_dir)
+        service_dict['build'] = expand_path(working_dir, service_dict['build'])
 
     if 'labels' in service_dict:
         service_dict['labels'] = parse_labels(service_dict['labels'])
 
+    if 'ulimits' in service_dict:
+        validate_ulimits(service_dict['ulimits'])
+
     return service_dict
 
 
@@ -424,7 +445,7 @@ def merge_environment(base, override):
     return env
 
 
-def get_env_files(options, working_dir=None):
+def get_env_files(working_dir, options):
     if 'env_file' not in options:
         return {}
 
@@ -453,7 +474,7 @@ def parse_environment(environment):
 
 def split_env(env):
     if isinstance(env, six.binary_type):
-        env = env.decode('utf-8')
+        env = env.decode('utf-8', 'replace')
     if '=' in env:
         return env.split('=', 1)
     else:
@@ -484,34 +505,25 @@ def env_vars_from_file(filename):
     return env
 
 
-def resolve_volume_paths(service_dict, working_dir=None):
-    if working_dir is None:
-        raise Exception("No working_dir passed to resolve_volume_paths()")
-
+def resolve_volume_paths(working_dir, service_dict):
     return [
-        resolve_volume_path(v, working_dir, service_dict['name'])
-        for v in service_dict['volumes']
+        resolve_volume_path(working_dir, volume)
+        for volume in service_dict['volumes']
     ]
 
 
-def resolve_volume_path(volume, working_dir, service_name):
+def resolve_volume_path(working_dir, volume):
     container_path, host_path = split_path_mapping(volume)
 
     if host_path is not None:
         if host_path.startswith('.'):
             host_path = expand_path(working_dir, host_path)
         host_path = os.path.expanduser(host_path)
-        return "{}:{}".format(host_path, container_path)
+        return u"{}:{}".format(host_path, container_path)
     else:
         return container_path
 
 
-def resolve_build_path(build_path, working_dir=None):
-    if working_dir is None:
-        raise Exception("No working_dir passed to resolve_build_path")
-    return expand_path(working_dir, build_path)
-
-
 def validate_paths(service_dict):
     if 'build' in service_dict:
         build_path = service_dict['build']
@@ -578,7 +590,7 @@ def parse_labels(labels):
         return dict(split_label(e) for e in labels)
 
     if isinstance(labels, dict):
-        return labels
+        return dict(labels)
 
 
 def split_label(label):
diff --git a/compose/config/fields_schema.json b/compose/config/fields_schema.json
index e254e3539f..ca3b3a5029 100644
--- a/compose/config/fields_schema.json
+++ b/compose/config/fields_schema.json
@@ -2,15 +2,18 @@
   "$schema": "http://json-schema.org/draft-04/schema#",
 
   "type": "object",
+  "id": "fields_schema.json",
 
   "patternProperties": {
     "^[a-zA-Z0-9._-]+$": {
       "$ref": "#/definitions/service"
     }
   },
+  "additionalProperties": false,
 
   "definitions": {
     "service": {
+      "id": "#/definitions/service",
       "type": "object",
 
       "properties": {
@@ -40,7 +43,7 @@
             {
               "type": "object",
               "patternProperties": {
-                "^[^-]+$": {
+                ".+": {
                   "type": ["string", "number", "boolean", "null"],
                   "format": "environment"
                 }
@@ -89,7 +92,6 @@
         "mac_address": {"type": "string"},
         "mem_limit": {"type": ["number", "string"]},
         "memswap_limit": {"type": ["number", "string"]},
-        "name": {"type": "string"},
         "net": {"type": "string"},
         "pid": {"type": ["string", "null"]},
 
@@ -116,6 +118,25 @@
         "security_opt": {"type": "array", "items": {"type": "string"}, "uniqueItems": true},
         "stdin_open": {"type": "boolean"},
         "tty": {"type": "boolean"},
+        "ulimits": {
+          "type": "object",
+          "patternProperties": {
+            "^[a-z]+$": {
+              "oneOf": [
+                {"type": "integer"},
+                {
+                  "type":"object",
+                  "properties": {
+                    "hard": {"type": "integer"},
+                    "soft": {"type": "integer"}
+                  },
+                  "required": ["soft", "hard"],
+                  "additionalProperties": false
+                }
+              ]
+            }
+          }
+        },
         "user": {"type": "string"},
         "volumes": {"type": "array", "items": {"type": "string"}, "uniqueItems": true},
         "volume_driver": {"type": "string"},
@@ -149,6 +170,5 @@
       ]
     }
 
-  },
-  "additionalProperties": false
+  }
 }
diff --git a/compose/config/interpolation.py b/compose/config/interpolation.py
index f8e1da610d..ba7e35c1e5 100644
--- a/compose/config/interpolation.py
+++ b/compose/config/interpolation.py
@@ -18,13 +18,6 @@ def interpolate_environment_variables(config):
 
 
 def process_service(service_name, service_dict, mapping):
-    if not isinstance(service_dict, dict):
-        raise ConfigurationError(
-            'Service "%s" doesn\'t have any configuration options. '
-            'All top level keys in your docker-compose.yml must map '
-            'to a dictionary of configuration options.' % service_name
-        )
-
     return dict(
         (key, interpolate_value(service_name, key, val, mapping))
         for (key, val) in service_dict.items()
diff --git a/compose/config/service_schema.json b/compose/config/service_schema.json
index 5cb5d6d070..05774efdda 100644
--- a/compose/config/service_schema.json
+++ b/compose/config/service_schema.json
@@ -1,21 +1,17 @@
 {
   "$schema": "http://json-schema.org/draft-04/schema#",
+  "id": "service_schema.json",
 
   "type": "object",
 
-  "properties": {
-      "name": {"type": "string"}
-  },
-
-  "required": ["name"],
-
   "allOf": [
     {"$ref": "fields_schema.json#/definitions/service"},
-    {"$ref": "#/definitions/service_constraints"}
+    {"$ref": "#/definitions/constraints"}
   ],
 
   "definitions": {
-    "service_constraints": {
+    "constraints": {
+      "id": "#/definitions/constraints",
       "anyOf": [
         {
           "required": ["build"],
@@ -27,13 +23,8 @@
             {"required": ["build"]},
             {"required": ["dockerfile"]}
           ]}
-        },
-        {
-          "required": ["extends"],
-          "not": {"required": ["build", "image"]}
         }
       ]
     }
   }
-
 }
diff --git a/compose/config/validation.py b/compose/config/validation.py
index 542081d526..38866b0f4f 100644
--- a/compose/config/validation.py
+++ b/compose/config/validation.py
@@ -66,21 +66,38 @@ def format_boolean_in_environment(instance):
     return True
 
 
-def validate_service_names(config):
-    for service_name in config.keys():
+def validate_top_level_service_objects(config_file):
+    """Perform some high level validation of the service name and value.
+
+    This validation must happen before interpolation, which must happen
+    before the rest of validation, which is why it's separate from the
+    rest of the service validation.
+    """
+    for service_name, service_dict in config_file.config.items():
         if not isinstance(service_name, six.string_types):
             raise ConfigurationError(
-                "Service name: {} needs to be a string, eg '{}'".format(
+                "In file '{}' service name: {} needs to be a string, eg '{}'".format(
+                    config_file.filename,
                     service_name,
                     service_name))
 
+        if not isinstance(service_dict, dict):
+            raise ConfigurationError(
+                "In file '{}' service '{}' doesn\'t have any configuration options. "
+                "All top level keys in your docker-compose.yml must map "
+                "to a dictionary of configuration options.".format(
+                    config_file.filename,
+                    service_name))
 
-def validate_top_level_object(config):
-    if not isinstance(config, dict):
+
+def validate_top_level_object(config_file):
+    if not isinstance(config_file.config, dict):
         raise ConfigurationError(
-            "Top level object needs to be a dictionary. Check your .yml file "
-            "that you have defined a service at the top level.")
-    validate_service_names(config)
+            "Top level object in '{}' needs to be an object not '{}'. Check "
+            "that you have defined a service at the top level.".format(
+                config_file.filename,
+                type(config_file.config)))
+    validate_top_level_service_objects(config_file)
 
 
 def validate_extends_file_path(service_name, extends_options, filename):
@@ -96,14 +113,6 @@ def validate_extends_file_path(service_name, extends_options, filename):
         )
 
 
-def validate_extended_service_exists(extended_service_name, full_extended_config, extended_config_path):
-    if extended_service_name not in full_extended_config:
-        msg = (
-            "Cannot extend service '%s' in %s: Service not found"
-        ) % (extended_service_name, extended_config_path)
-        raise ConfigurationError(msg)
-
-
 def get_unsupported_config_msg(service_name, error_key):
     msg = "Unsupported config option for '{}' service: '{}'".format(service_name, error_key)
     if error_key in DOCKER_CONFIG_HINTS:
@@ -117,189 +126,171 @@ def anglicize_validator(validator):
     return 'a ' + validator
 
 
-def process_errors(errors, service_name=None):
+def handle_error_for_schema_with_id(error, service_name):
+    schema_id = error.schema['id']
+
+    if schema_id == 'fields_schema.json' and error.validator == 'additionalProperties':
+        return "Invalid service name '{}' - only {} characters are allowed".format(
+            # The service_name is the key to the json object
+            list(error.instance)[0],
+            VALID_NAME_CHARS)
+
+    if schema_id == '#/definitions/constraints':
+        if 'image' in error.instance and 'build' in error.instance:
+            return (
+                "Service '{}' has both an image and build path specified. "
+                "A service can either be built to image or use an existing "
+                "image, not both.".format(service_name))
+        if 'image' not in error.instance and 'build' not in error.instance:
+            return (
+                "Service '{}' has neither an image nor a build path "
+                "specified. Exactly one must be provided.".format(service_name))
+        if 'image' in error.instance and 'dockerfile' in error.instance:
+            return (
+                "Service '{}' has both an image and alternate Dockerfile. "
+                "A service can either be built to image or use an existing "
+                "image, not both.".format(service_name))
+
+    if schema_id == '#/definitions/service':
+        if error.validator == 'additionalProperties':
+            invalid_config_key = parse_key_from_error_msg(error)
+            return get_unsupported_config_msg(service_name, invalid_config_key)
+
+
+def handle_generic_service_error(error, service_name):
+    config_key = " ".join("'%s'" % k for k in error.path)
+    msg_format = None
+    error_msg = error.message
+
+    if error.validator == 'oneOf':
+        msg_format = "Service '{}' configuration key {} {}"
+        error_msg = _parse_oneof_validator(error)
+
+    elif error.validator == 'type':
+        msg_format = ("Service '{}' configuration key {} contains an invalid "
+                      "type, it should be {}")
+        error_msg = _parse_valid_types_from_validator(error.validator_value)
+
+    # TODO: no test case for this branch, there are no config options
+    # which exercise this branch
+    elif error.validator == 'required':
+        msg_format = "Service '{}' configuration key '{}' is invalid, {}"
+
+    elif error.validator == 'dependencies':
+        msg_format = "Service '{}' configuration key '{}' is invalid: {}"
+        config_key = list(error.validator_value.keys())[0]
+        required_keys = ",".join(error.validator_value[config_key])
+        error_msg = "when defining '{}' you must set '{}' as well".format(
+            config_key,
+            required_keys)
+
+    elif error.path:
+        msg_format = "Service '{}' configuration key {} value {}"
+
+    if msg_format:
+        return msg_format.format(service_name, config_key, error_msg)
+
+    return error.message
+
+
+def parse_key_from_error_msg(error):
+    return error.message.split("'")[1]
+
+
+def _parse_valid_types_from_validator(validator):
+    """A validator value can be either an array of valid types or a string of
+    a valid type. Parse the valid types and prefix with the correct article.
     """
-    jsonschema gives us an error tree full of information to explain what has
+    if not isinstance(validator, list):
+        return anglicize_validator(validator)
+
+    if len(validator) == 1:
+        return anglicize_validator(validator[0])
+
+    return "{}, or {}".format(
+        ", ".join([anglicize_validator(validator[0])] + validator[1:-1]),
+        anglicize_validator(validator[-1]))
+
+
+def _parse_oneof_validator(error):
+    """oneOf has multiple schemas, so we need to reason about which schema, sub
+    schema or constraint the validation is failing on.
+    Inspecting the context value of a ValidationError gives us information about
+    which sub schema failed and which kind of error it is.
+    """
+    types = []
+    for context in error.context:
+
+        if context.validator == 'required':
+            return context.message
+
+        if context.validator == 'additionalProperties':
+            invalid_config_key = parse_key_from_error_msg(context)
+            return "contains unsupported option: '{}'".format(invalid_config_key)
+
+        if context.path:
+            invalid_config_key = " ".join(
+                "'{}' ".format(fragment) for fragment in context.path
+                if isinstance(fragment, six.string_types)
+            )
+            return "{}contains {}, which is an invalid type, it should be {}".format(
+                invalid_config_key,
+                context.instance,
+                _parse_valid_types_from_validator(context.validator_value))
+
+        if context.validator == 'uniqueItems':
+            return "contains non unique items, please remove duplicates from {}".format(
+                context.instance)
+
+        if context.validator == 'type':
+            types.append(context.validator_value)
+
+    valid_types = _parse_valid_types_from_validator(types)
+    return "contains an invalid type, it should be {}".format(valid_types)
+
+
+def process_errors(errors, service_name=None):
+    """jsonschema gives us an error tree full of information to explain what has
     gone wrong. Process each error and pull out relevant information and re-write
     helpful error messages that are relevant.
     """
-    def _parse_key_from_error_msg(error):
-        return error.message.split("'")[1]
+    def format_error_message(error, service_name):
+        if not service_name and error.path:
+            # field_schema errors will have service name on the path
+            service_name = error.path.popleft()
 
-    def _clean_error_message(message):
-        return message.replace("u'", "'")
+        if 'id' in error.schema:
+            error_msg = handle_error_for_schema_with_id(error, service_name)
+            if error_msg:
+                return error_msg
 
-    def _parse_valid_types_from_validator(validator):
-        """
-        A validator value can be either an array of valid types or a string of
-        a valid type. Parse the valid types and prefix with the correct article.
-        """
-        if isinstance(validator, list):
-            if len(validator) >= 2:
-                first_type = anglicize_validator(validator[0])
-                last_type = anglicize_validator(validator[-1])
-                types_from_validator = ", ".join([first_type] + validator[1:-1])
+        return handle_generic_service_error(error, service_name)
 
-                msg = "{} or {}".format(
-                    types_from_validator,
-                    last_type
-                )
-            else:
-                msg = "{}".format(anglicize_validator(validator[0]))
-        else:
-            msg = "{}".format(anglicize_validator(validator))
-
-        return msg
-
-    def _parse_oneof_validator(error):
-        """
-        oneOf has multiple schemas, so we need to reason about which schema, sub
-        schema or constraint the validation is failing on.
-        Inspecting the context value of a ValidationError gives us information about
-        which sub schema failed and which kind of error it is.
-        """
-        required = [context for context in error.context if context.validator == 'required']
-        if required:
-            return required[0].message
-
-        additionalProperties = [context for context in error.context if context.validator == 'additionalProperties']
-        if additionalProperties:
-            invalid_config_key = _parse_key_from_error_msg(additionalProperties[0])
-            return "contains unsupported option: '{}'".format(invalid_config_key)
-
-        constraint = [context for context in error.context if len(context.path) > 0]
-        if constraint:
-            valid_types = _parse_valid_types_from_validator(constraint[0].validator_value)
-            invalid_config_key = "".join(
-                "'{}' ".format(fragment) for fragment in constraint[0].path
-                if isinstance(fragment, six.string_types)
-            )
-            msg = "{}contains {}, which is an invalid type, it should be {}".format(
-                invalid_config_key,
-                constraint[0].instance,
-                valid_types
-            )
-            return msg
-
-        uniqueness = [context for context in error.context if context.validator == 'uniqueItems']
-        if uniqueness:
-            msg = "contains non unique items, please remove duplicates from {}".format(
-                uniqueness[0].instance
-            )
-            return msg
-
-        types = [context.validator_value for context in error.context if context.validator == 'type']
-        valid_types = _parse_valid_types_from_validator(types)
-
-        msg = "contains an invalid type, it should be {}".format(valid_types)
-
-        return msg
-
-    root_msgs = []
-    invalid_keys = []
-    required = []
-    type_errors = []
-    other_errors = []
-
-    for error in errors:
-        # handle root level errors
-        if len(error.path) == 0 and not error.instance.get('name'):
-            if error.validator == 'type':
-                msg = "Top level object needs to be a dictionary. Check your .yml file that you have defined a service at the top level."
-                root_msgs.append(msg)
-            elif error.validator == 'additionalProperties':
-                invalid_service_name = _parse_key_from_error_msg(error)
-                msg = "Invalid service name '{}' - only {} characters are allowed".format(invalid_service_name, VALID_NAME_CHARS)
-                root_msgs.append(msg)
-            else:
-                root_msgs.append(_clean_error_message(error.message))
-
-        else:
-            if not service_name:
-                # field_schema errors will have service name on the path
-                service_name = error.path[0]
-                error.path.popleft()
-            else:
-                # service_schema errors have the service name passed in, as that
-                # is not available on error.path or necessarily error.instance
-                service_name = service_name
-
-            if error.validator == 'additionalProperties':
-                invalid_config_key = _parse_key_from_error_msg(error)
-                invalid_keys.append(get_unsupported_config_msg(service_name, invalid_config_key))
-            elif error.validator == 'anyOf':
-                if 'image' in error.instance and 'build' in error.instance:
-                    required.append(
-                        "Service '{}' has both an image and build path specified. "
-                        "A service can either be built to image or use an existing "
-                        "image, not both.".format(service_name))
-                elif 'image' not in error.instance and 'build' not in error.instance:
-                    required.append(
-                        "Service '{}' has neither an image nor a build path "
-                        "specified. Exactly one must be provided.".format(service_name))
-                elif 'image' in error.instance and 'dockerfile' in error.instance:
-                    required.append(
-                        "Service '{}' has both an image and alternate Dockerfile. "
-                        "A service can either be built to image or use an existing "
-                        "image, not both.".format(service_name))
-                else:
-                    required.append(_clean_error_message(error.message))
-            elif error.validator == 'oneOf':
-                config_key = error.path[0]
-                msg = _parse_oneof_validator(error)
-
-                type_errors.append("Service '{}' configuration key '{}' {}".format(
-                    service_name, config_key, msg)
-                )
-            elif error.validator == 'type':
-                msg = _parse_valid_types_from_validator(error.validator_value)
-
-                if len(error.path) > 0:
-                    config_key = " ".join(["'%s'" % k for k in error.path])
-                    type_errors.append(
-                        "Service '{}' configuration key {} contains an invalid "
-                        "type, it should be {}".format(
-                            service_name,
-                            config_key,
-                            msg))
-                else:
-                    root_msgs.append(
-                        "Service '{}' doesn\'t have any configuration options. "
-                        "All top level keys in your docker-compose.yml must map "
-                        "to a dictionary of configuration options.'".format(service_name))
-            elif error.validator == 'required':
-                config_key = error.path[0]
-                required.append(
-                    "Service '{}' option '{}' is invalid, {}".format(
-                        service_name,
-                        config_key,
-                        _clean_error_message(error.message)))
-            elif error.validator == 'dependencies':
-                dependency_key = list(error.validator_value.keys())[0]
-                required_keys = ",".join(error.validator_value[dependency_key])
-                required.append("Invalid '{}' configuration for '{}' service: when defining '{}' you must set '{}' as well".format(
-                    dependency_key, service_name, dependency_key, required_keys))
-            else:
-                config_key = " ".join(["'%s'" % k for k in error.path])
-                err_msg = "Service '{}' configuration key {} value {}".format(service_name, config_key, error.message)
-                other_errors.append(err_msg)
-
-    return "\n".join(root_msgs + invalid_keys + required + type_errors + other_errors)
+    return '\n'.join(format_error_message(error, service_name) for error in errors)
 
 
-def validate_against_fields_schema(config):
-    schema_filename = "fields_schema.json"
-    format_checkers = ["ports", "environment"]
-    return _validate_against_schema(config, schema_filename, format_checkers)
+def validate_against_fields_schema(config, filename):
+    _validate_against_schema(
+        config,
+        "fields_schema.json",
+        format_checker=["ports", "environment"],
+        filename=filename)
 
 
 def validate_against_service_schema(config, service_name):
-    schema_filename = "service_schema.json"
-    format_checkers = ["ports"]
-    return _validate_against_schema(config, schema_filename, format_checkers, service_name)
+    _validate_against_schema(
+        config,
+        "service_schema.json",
+        format_checker=["ports"],
+        service_name=service_name)
 
 
-def _validate_against_schema(config, schema_filename, format_checker=[], service_name=None):
+def _validate_against_schema(
+        config,
+        schema_filename,
+        format_checker=(),
+        service_name=None,
+        filename=None):
     config_source_dir = os.path.dirname(os.path.abspath(__file__))
 
     if sys.platform == "win32":
@@ -315,9 +306,17 @@ def _validate_against_schema(config, schema_filename, format_checker=[], service
         schema = json.load(schema_fh)
 
     resolver = RefResolver(resolver_full_path, schema)
-    validation_output = Draft4Validator(schema, resolver=resolver, format_checker=FormatChecker(format_checker))
+    validation_output = Draft4Validator(
+        schema,
+        resolver=resolver,
+        format_checker=FormatChecker(format_checker))
 
     errors = [error for error in sorted(validation_output.iter_errors(config), key=str)]
-    if errors:
-        error_msg = process_errors(errors, service_name)
-        raise ConfigurationError("Validation failed, reason(s):\n{}".format(error_msg))
+    if not errors:
+        return
+
+    error_msg = process_errors(errors, service_name)
+    file_msg = " in file '{}'".format(filename) if filename else ''
+    raise ConfigurationError("Validation failed{}, reason(s):\n{}".format(
+        file_msg,
+        error_msg))
diff --git a/compose/progress_stream.py b/compose/progress_stream.py
index ac8e4b410f..a6c8e0a263 100644
--- a/compose/progress_stream.py
+++ b/compose/progress_stream.py
@@ -14,26 +14,34 @@ def stream_output(output, stream):
 
     for event in utils.json_stream(output):
         all_events.append(event)
+        is_progress_event = 'progress' in event or 'progressDetail' in event
 
-        if 'progress' in event or 'progressDetail' in event:
-            image_id = event.get('id')
-            if not image_id:
-                continue
+        if not is_progress_event:
+            print_output_event(event, stream, is_terminal)
+            stream.flush()
+            continue
 
-            if image_id in lines:
-                diff = len(lines) - lines[image_id]
-            else:
-                lines[image_id] = len(lines)
-                stream.write("\n")
-                diff = 0
+        if not is_terminal:
+            continue
 
-            if is_terminal:
-                # move cursor up `diff` rows
-                stream.write("%c[%dA" % (27, diff))
+        # if it's a progress event and we have a terminal, then display the progress bars
+        image_id = event.get('id')
+        if not image_id:
+            continue
+
+        if image_id in lines:
+            diff = len(lines) - lines[image_id]
+        else:
+            lines[image_id] = len(lines)
+            stream.write("\n")
+            diff = 0
+
+        # move cursor up `diff` rows
+        stream.write("%c[%dA" % (27, diff))
 
         print_output_event(event, stream, is_terminal)
 
-        if 'id' in event and is_terminal:
+        if 'id' in event:
             # move cursor back down
             stream.write("%c[%dB" % (27, diff))
 
diff --git a/compose/project.py b/compose/project.py
index 1e01eaf6d2..41af862615 100644
--- a/compose/project.py
+++ b/compose/project.py
@@ -278,10 +278,10 @@ class Project(object):
         for service in self.get_services(service_names):
             service.restart(**options)
 
-    def build(self, service_names=None, no_cache=False, pull=False):
+    def build(self, service_names=None, no_cache=False, pull=False, force_rm=False):
         for service in self.get_services(service_names):
             if service.can_be_built():
-                service.build(no_cache, pull)
+                service.build(no_cache, pull, force_rm)
             else:
                 log.info('%s uses an image, skipping' % service.name)
 
@@ -300,7 +300,7 @@ class Project(object):
 
         plans = self._get_convergence_plans(services, strategy)
 
-        if self.use_networking:
+        if self.use_networking and self.uses_default_network():
             self.ensure_network_exists()
 
         return [
@@ -322,7 +322,7 @@ class Project(object):
                 name
                 for name in service.get_dependency_names()
                 if name in plans
-                and plans[name].action == 'recreate'
+                and plans[name].action in ('recreate', 'create')
             ]
 
             if updated_dependencies and strategy.allows_recreate:
@@ -383,7 +383,10 @@ class Project(object):
     def remove_network(self):
         network = self.get_network()
         if network:
-            self.client.remove_network(network['id'])
+            self.client.remove_network(network['Id'])
+
+    def uses_default_network(self):
+        return any(service.net.mode == self.name for service in self.services)
 
     def _inject_deps(self, acc, service):
         dep_names = service.get_dependency_names()
diff --git a/compose/service.py b/compose/service.py
index 66c90b0e03..cc49159926 100644
--- a/compose/service.py
+++ b/compose/service.py
@@ -300,9 +300,7 @@ class Service(object):
         Create a container for this service. If the image doesn't exist, attempt to pull
         it.
         """
-        self.ensure_image_exists(
-            do_build=do_build,
-        )
+        self.ensure_image_exists(do_build=do_build)
 
         container_options = self._get_container_create_options(
             override_options,
@@ -316,9 +314,7 @@ class Service(object):
 
         return Container.create(self.client, **container_options)
 
-    def ensure_image_exists(self,
-                            do_build=True):
-
+    def ensure_image_exists(self, do_build=True):
         try:
             self.image()
             return
@@ -410,7 +406,7 @@ class Service(object):
             if should_attach_logs:
                 container.attach_log_stream()
 
-            self.start_container(container)
+            container.start()
 
             return [container]
 
@@ -418,6 +414,7 @@ class Service(object):
             return [
                 self.recreate_container(
                     container,
+                    do_build=do_build,
                     timeout=timeout,
                     attach_logs=should_attach_logs
                 )
@@ -439,10 +436,12 @@ class Service(object):
         else:
             raise Exception("Invalid action: {}".format(action))
 
-    def recreate_container(self,
-                           container,
-                           timeout=DEFAULT_TIMEOUT,
-                           attach_logs=False):
+    def recreate_container(
+            self,
+            container,
+            do_build=False,
+            timeout=DEFAULT_TIMEOUT,
+            attach_logs=False):
         """Recreate a container.
 
         The original container is renamed to a temporary name so that data
@@ -454,28 +453,23 @@ class Service(object):
         container.stop(timeout=timeout)
         container.rename_to_tmp_name()
         new_container = self.create_container(
-            do_build=False,
+            do_build=do_build,
             previous_container=container,
             number=container.labels.get(LABEL_CONTAINER_NUMBER),
             quiet=True,
         )
         if attach_logs:
             new_container.attach_log_stream()
-        self.start_container(new_container)
+        new_container.start()
         container.remove()
         return new_container
 
     def start_container_if_stopped(self, container, attach_logs=False):
-        if container.is_running:
-            return container
-        else:
+        if not container.is_running:
             log.info("Starting %s" % container.name)
             if attach_logs:
                 container.attach_log_stream()
-            return self.start_container(container)
-
-    def start_container(self, container):
-        container.start()
+            container.start()
         return container
 
     def remove_duplicate_containers(self, timeout=DEFAULT_TIMEOUT):
@@ -508,7 +502,9 @@ class Service(object):
             'image_id': self.image()['Id'],
             'links': self.get_link_names(),
             'net': self.net.id,
-            'volumes_from': self.get_volumes_from_names(),
+            'volumes_from': [
+                (v.source.name, v.mode) for v in self.volumes_from if isinstance(v.source, Service)
+            ],
         }
 
     def get_dependency_names(self):
@@ -605,9 +601,6 @@ class Service(object):
             container_options['hostname'] = parts[0]
             container_options['domainname'] = parts[2]
 
-        if 'hostname' not in container_options and self.use_networking:
-            container_options['hostname'] = self.name
-
         if 'ports' in container_options or 'expose' in self.options:
             ports = []
             all_ports = container_options.get('ports', []) + self.options.get('expose', [])
@@ -683,6 +676,7 @@ class Service(object):
 
         devices = options.get('devices', None)
         cgroup_parent = options.get('cgroup_parent', None)
+        ulimits = build_ulimits(options.get('ulimits', None))
 
         return self.client.create_host_config(
             links=self._get_links(link_to_self=one_off),
@@ -699,6 +693,7 @@ class Service(object):
             cap_drop=cap_drop,
             mem_limit=options.get('mem_limit'),
             memswap_limit=options.get('memswap_limit'),
+            ulimits=ulimits,
             log_config=log_config,
             extra_hosts=extra_hosts,
             read_only=read_only,
@@ -708,7 +703,7 @@ class Service(object):
             cgroup_parent=cgroup_parent
         )
 
-    def build(self, no_cache=False, pull=False):
+    def build(self, no_cache=False, pull=False, force_rm=False):
         log.info('Building %s' % self.name)
 
         path = self.options['build']
@@ -722,6 +717,7 @@ class Service(object):
             tag=self.image_name,
             stream=True,
             rm=True,
+            forcerm=force_rm,
             pull=pull,
             nocache=no_cache,
             dockerfile=self.options.get('dockerfile', None),
@@ -899,14 +895,17 @@ def merge_volume_bindings(volumes_option, previous_container):
     """Return a list of volume bindings for a container. Container data volumes
     are replaced by those from the previous container.
     """
+    volumes = [parse_volume_spec(volume) for volume in volumes_option or []]
     volume_bindings = dict(
-        build_volume_binding(parse_volume_spec(volume))
-        for volume in volumes_option or []
-        if ':' in volume)
+        build_volume_binding(volume)
+        for volume in volumes
+        if volume.external)
 
     if previous_container:
+        data_volumes = get_container_data_volumes(previous_container, volumes)
+        warn_on_masked_volume(volumes, data_volumes, previous_container.service)
         volume_bindings.update(
-            get_container_data_volumes(previous_container, volumes_option))
+            build_volume_binding(volume) for volume in data_volumes)
 
     return list(volume_bindings.values())
 
@@ -916,13 +915,14 @@ def get_container_data_volumes(container, volumes_option):
     a mapping of volume bindings for those volumes.
     """
     volumes = []
-
-    volumes_option = volumes_option or []
     container_volumes = container.get('Volumes') or {}
-    image_volumes = container.image_config['ContainerConfig'].get('Volumes') or {}
+    image_volumes = [
+        parse_volume_spec(volume)
+        for volume in
+        container.image_config['ContainerConfig'].get('Volumes') or {}
+    ]
 
-    for volume in set(volumes_option + list(image_volumes)):
-        volume = parse_volume_spec(volume)
+    for volume in set(volumes_option + image_volumes):
         # No need to preserve host volumes
         if volume.external:
             continue
@@ -934,9 +934,27 @@ def get_container_data_volumes(container, volumes_option):
 
         # Copy existing volume from old container
         volume = volume._replace(external=volume_path)
-        volumes.append(build_volume_binding(volume))
+        volumes.append(volume)
 
-    return dict(volumes)
+    return volumes
+
+
+def warn_on_masked_volume(volumes_option, container_volumes, service):
+    container_volumes = dict(
+        (volume.internal, volume.external)
+        for volume in container_volumes)
+
+    for volume in volumes_option:
+        if container_volumes.get(volume.internal) != volume.external:
+            log.warn((
+                "Service \"{service}\" is using volume \"{volume}\" from the "
+                "previous container. Host mapping \"{host_path}\" has no effect. "
+                "Remove the existing containers (with `docker-compose rm {service}`) "
+                "to use the host volume mapping."
+            ).format(
+                service=service,
+                volume=volume.internal,
+                host_path=volume.external))
 
 
 def build_volume_binding(volume_spec):
@@ -1058,6 +1076,23 @@ def parse_restart_spec(restart_config):
 
     return {'Name': name, 'MaximumRetryCount': int(max_retry_count)}
 
+# Ulimits
+
+
+def build_ulimits(ulimit_config):
+    if not ulimit_config:
+        return None
+    ulimits = []
+    for limit_name, soft_hard_values in six.iteritems(ulimit_config):
+        if isinstance(soft_hard_values, six.integer_types):
+            ulimits.append({'name': limit_name, 'soft': soft_hard_values, 'hard': soft_hard_values})
+        elif isinstance(soft_hard_values, dict):
+            ulimit_dict = {'name': limit_name}
+            ulimit_dict.update(soft_hard_values)
+            ulimits.append(ulimit_dict)
+
+    return ulimits
+
 
 # Extra hosts
 
diff --git a/compose/utils.py b/compose/utils.py
index c8fddc5f16..2c6c4584d2 100644
--- a/compose/utils.py
+++ b/compose/utils.py
@@ -95,7 +95,7 @@ def stream_as_text(stream):
     """
     for data in stream:
         if not isinstance(data, six.text_type):
-            data = data.decode('utf-8')
+            data = data.decode('utf-8', 'replace')
         yield data
 
 
@@ -164,7 +164,7 @@ def write_out_msg(stream, lines, msg_index, msg, status="done"):
         stream.write("%c[%dA" % (27, diff))
         # erase
         stream.write("%c[2K\r" % 27)
-        stream.write("{} {} ... {}\n".format(msg, obj_index, status))
+        stream.write("{} {} ... {}\r".format(msg, obj_index, status))
         # move back down
         stream.write("%c[%dB" % (27, diff))
     else:
diff --git a/contrib/completion/bash/docker-compose b/contrib/completion/bash/docker-compose
index 0eed1f18b7..72e159e08a 100644
--- a/contrib/completion/bash/docker-compose
+++ b/contrib/completion/bash/docker-compose
@@ -87,7 +87,7 @@ __docker_compose_services_stopped() {
 _docker_compose_build() {
 	case "$cur" in
 		-*)
-			COMPREPLY=( $( compgen -W "--help --no-cache --pull" -- "$cur" ) )
+			COMPREPLY=( $( compgen -W "--force-rm --help --no-cache --pull" -- "$cur" ) )
 			;;
 		*)
 			__docker_compose_services_from_build
diff --git a/contrib/completion/zsh/_docker-compose b/contrib/completion/zsh/_docker-compose
index d79b25d165..08d5150d9e 100644
--- a/contrib/completion/zsh/_docker-compose
+++ b/contrib/completion/zsh/_docker-compose
@@ -192,6 +192,7 @@ __docker-compose_subcommand() {
         (build)
             _arguments \
                 $opts_help \
+                '--force-rm[Always remove intermediate containers.]' \
                 '--no-cache[Do not use cache when building the image]' \
                 '--pull[Always attempt to pull a newer version of the image.]' \
                 '*:services:__docker-compose_services_from_build' && ret=0
diff --git a/docs/compose-file.md b/docs/compose-file.md
index 034653efe8..d5aeaa3f29 100644
--- a/docs/compose-file.md
+++ b/docs/compose-file.md
@@ -331,6 +331,18 @@ Override the default labeling scheme for each container.
         - label:user:USER
         - label:role:ROLE
 
+### ulimits
+
+Override the default ulimits for a container. You can either specify a single
+limit as an integer or soft/hard limits as a mapping.
+
+
+      ulimits:
+        nproc: 65535
+        nofile:
+          soft: 20000
+          hard: 40000
+
 ### volumes, volume\_driver
 
 Mount paths as volumes, optionally specifying a path on the host machine
diff --git a/docs/install.md b/docs/install.md
index c5304409c5..f8c9db6383 100644
--- a/docs/install.md
+++ b/docs/install.md
@@ -39,7 +39,7 @@ which the release page specifies, in your terminal.
 
      The following is an example command illustrating the format:
 
-        curl -L https://github.com/docker/compose/releases/download/VERSION_NUM/docker-compose-`uname -s`-`uname -m` > /usr/local/bin/docker-compose
+        curl -L https://github.com/docker/compose/releases/download/1.5.1/docker-compose-`uname -s`-`uname -m` > /usr/local/bin/docker-compose
 
      If you have problems installing with `curl`, see
      [Alternative Install Options](#alternative-install-options).
@@ -54,7 +54,7 @@ which the release page specifies, in your terminal.
 7. Test the installation.
 
         $ docker-compose --version
-        docker-compose version: 1.5.0
+        docker-compose version: 1.5.1
 
 
 ## Alternative install options
@@ -76,7 +76,7 @@ to get started.
 Compose can also be run inside a container, from a small bash script wrapper.
 To install compose as a container run:
 
-    $ curl -L https://github.com/docker/compose/releases/download/1.5.0/run.sh > /usr/local/bin/docker-compose
+    $ curl -L https://github.com/docker/compose/releases/download/1.5.1/run.sh > /usr/local/bin/docker-compose
     $ chmod +x /usr/local/bin/docker-compose
 
 ## Master builds
diff --git a/docs/reference/build.md b/docs/reference/build.md
index c427199fec..84aefc253f 100644
--- a/docs/reference/build.md
+++ b/docs/reference/build.md
@@ -15,6 +15,7 @@ parent = "smn_compose_cli"
 Usage: build [options] [SERVICE...]
 
 Options:
+--force-rm  Always remove intermediate containers.
 --no-cache  Do not use cache when building the image.
 --pull      Always attempt to pull a newer version of the image.
 ```
diff --git a/requirements.txt b/requirements.txt
index daaaa95026..60327d728d 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,4 +1,4 @@
-PyYAML==3.10
+PyYAML==3.11
 docker-py==1.5.0
 dockerpty==0.3.4
 docopt==0.6.1
diff --git a/script/run.sh b/script/run.sh
index cf46c143c3..a9b954774f 100755
--- a/script/run.sh
+++ b/script/run.sh
@@ -15,7 +15,7 @@
 
 set -e
 
-VERSION="1.5.0"
+VERSION="1.5.1"
 IMAGE="docker/compose:$VERSION"
 
 
diff --git a/tests/acceptance/__init__.py b/tests/acceptance/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/integration/cli_test.py b/tests/acceptance/cli_test.py
similarity index 55%
rename from tests/integration/cli_test.py
rename to tests/acceptance/cli_test.py
index d621f2d132..88a43d7f0e 100644
--- a/tests/integration/cli_test.py
+++ b/tests/acceptance/cli_test.py
@@ -2,30 +2,31 @@ from __future__ import absolute_import
 
 import os
 import shlex
-import sys
+import subprocess
+from collections import namedtuple
 from operator import attrgetter
 
-from six import StringIO
-
 from .. import mock
-from .testcases import DockerClientTestCase
 from compose.cli.command import get_project
 from compose.cli.docker_client import docker_client
-from compose.cli.errors import UserError
-from compose.cli.main import TopLevelCommand
-from compose.project import NoSuchService
+from compose.container import Container
+from tests.integration.testcases import DockerClientTestCase
+
+
+ProcessResult = namedtuple('ProcessResult', 'stdout stderr')
+
+
+BUILD_CACHE_TEXT = 'Using cache'
+BUILD_PULL_TEXT = 'Status: Image is up to date for busybox:latest'
 
 
 class CLITestCase(DockerClientTestCase):
+
     def setUp(self):
         super(CLITestCase, self).setUp()
-        self.old_sys_exit = sys.exit
-        sys.exit = lambda code=0: None
-        self.command = TopLevelCommand()
-        self.command.base_dir = 'tests/fixtures/simple-composefile'
+        self.base_dir = 'tests/fixtures/simple-composefile'
 
     def tearDown(self):
-        sys.exit = self.old_sys_exit
         self.project.kill()
         self.project.remove_stopped()
         for container in self.project.containers(stopped=True, one_off=True):
@@ -34,129 +35,146 @@ class CLITestCase(DockerClientTestCase):
 
     @property
     def project(self):
-        # Hack: allow project to be overridden. This needs refactoring so that
-        # the project object is built exactly once, by the command object, and
-        # accessed by the test case object.
-        if hasattr(self, '_project'):
-            return self._project
+        # Hack: allow project to be overridden
+        if not hasattr(self, '_project'):
+            self._project = get_project(self.base_dir)
+        return self._project
 
-        return get_project(self.command.base_dir)
+    def dispatch(self, options, project_options=None, returncode=0):
+        project_options = project_options or []
+        proc = subprocess.Popen(
+            ['docker-compose'] + project_options + options,
+            stdout=subprocess.PIPE,
+            stderr=subprocess.PIPE,
+            cwd=self.base_dir)
+        print("Running process: %s" % proc.pid)
+        stdout, stderr = proc.communicate()
+        if proc.returncode != returncode:
+            print(stderr)
+            assert proc.returncode == returncode
+        return ProcessResult(stdout.decode('utf-8'), stderr.decode('utf-8'))
 
     def test_help(self):
-        old_base_dir = self.command.base_dir
-        self.command.base_dir = 'tests/fixtures/no-composefile'
-        with self.assertRaises(SystemExit) as exc_context:
-            self.command.dispatch(['help', 'up'], None)
-            self.assertIn('Usage: up [options] [SERVICE...]', str(exc_context.exception))
+        old_base_dir = self.base_dir
+        self.base_dir = 'tests/fixtures/no-composefile'
+        result = self.dispatch(['help', 'up'], returncode=1)
+        assert 'Usage: up [options] [SERVICE...]' in result.stderr
         # self.project.kill() fails during teardown
         # unless there is a composefile.
-        self.command.base_dir = old_base_dir
+        self.base_dir = old_base_dir
 
-    # TODO: address the "Inappropriate ioctl for device" warnings in test output
     def test_ps(self):
         self.project.get_service('simple').create_container()
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['ps'], None)
-        self.assertIn('simplecomposefile_simple_1', mock_stdout.getvalue())
+        result = self.dispatch(['ps'])
+        assert 'simplecomposefile_simple_1' in result.stdout
 
     def test_ps_default_composefile(self):
-        self.command.base_dir = 'tests/fixtures/multiple-composefiles'
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['up', '-d'], None)
-            self.command.dispatch(['ps'], None)
+        self.base_dir = 'tests/fixtures/multiple-composefiles'
+        self.dispatch(['up', '-d'])
+        result = self.dispatch(['ps'])
 
-        output = mock_stdout.getvalue()
-        self.assertIn('multiplecomposefiles_simple_1', output)
-        self.assertIn('multiplecomposefiles_another_1', output)
-        self.assertNotIn('multiplecomposefiles_yetanother_1', output)
+        self.assertIn('multiplecomposefiles_simple_1', result.stdout)
+        self.assertIn('multiplecomposefiles_another_1', result.stdout)
+        self.assertNotIn('multiplecomposefiles_yetanother_1', result.stdout)
 
     def test_ps_alternate_composefile(self):
         config_path = os.path.abspath(
             'tests/fixtures/multiple-composefiles/compose2.yml')
-        self._project = get_project(self.command.base_dir, [config_path])
+        self._project = get_project(self.base_dir, [config_path])
 
-        self.command.base_dir = 'tests/fixtures/multiple-composefiles'
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['-f', 'compose2.yml', 'up', '-d'], None)
-            self.command.dispatch(['-f', 'compose2.yml', 'ps'], None)
+        self.base_dir = 'tests/fixtures/multiple-composefiles'
+        self.dispatch(['-f', 'compose2.yml', 'up', '-d'])
+        result = self.dispatch(['-f', 'compose2.yml', 'ps'])
 
-        output = mock_stdout.getvalue()
-        self.assertNotIn('multiplecomposefiles_simple_1', output)
-        self.assertNotIn('multiplecomposefiles_another_1', output)
-        self.assertIn('multiplecomposefiles_yetanother_1', output)
+        self.assertNotIn('multiplecomposefiles_simple_1', result.stdout)
+        self.assertNotIn('multiplecomposefiles_another_1', result.stdout)
+        self.assertIn('multiplecomposefiles_yetanother_1', result.stdout)
 
-    @mock.patch('compose.service.log')
-    def test_pull(self, mock_logging):
-        self.command.dispatch(['pull'], None)
-        mock_logging.info.assert_any_call('Pulling simple (busybox:latest)...')
-        mock_logging.info.assert_any_call('Pulling another (busybox:latest)...')
+    def test_pull(self):
+        result = self.dispatch(['pull'])
+        assert sorted(result.stderr.split('\n'))[1:] == [
+            'Pulling another (busybox:latest)...',
+            'Pulling simple (busybox:latest)...',
+        ]
 
-    @mock.patch('compose.service.log')
-    def test_pull_with_digest(self, mock_logging):
-        self.command.dispatch(['-f', 'digest.yml', 'pull'], None)
-        mock_logging.info.assert_any_call('Pulling simple (busybox:latest)...')
-        mock_logging.info.assert_any_call(
-            'Pulling digest (busybox@'
-            'sha256:38a203e1986cf79639cfb9b2e1d6e773de84002feea2d4eb006b52004ee8502d)...')
+    def test_pull_with_digest(self):
+        result = self.dispatch(['-f', 'digest.yml', 'pull'])
 
-    @mock.patch('compose.service.log')
-    def test_pull_with_ignore_pull_failures(self, mock_logging):
-        self.command.dispatch(['-f', 'ignore-pull-failures.yml', 'pull', '--ignore-pull-failures'], None)
-        mock_logging.info.assert_any_call('Pulling simple (busybox:latest)...')
-        mock_logging.info.assert_any_call('Pulling another (nonexisting-image:latest)...')
-        mock_logging.error.assert_any_call('Error: image library/nonexisting-image:latest not found')
+        assert 'Pulling simple (busybox:latest)...' in result.stderr
+        assert ('Pulling digest (busybox@'
+                'sha256:38a203e1986cf79639cfb9b2e1d6e773de84002feea2d4eb006b520'
+                '04ee8502d)...') in result.stderr
+
+    def test_pull_with_ignore_pull_failures(self):
+        result = self.dispatch([
+            '-f', 'ignore-pull-failures.yml',
+            'pull', '--ignore-pull-failures'])
+
+        assert 'Pulling simple (busybox:latest)...' in result.stderr
+        assert 'Pulling another (nonexisting-image:latest)...' in result.stderr
+        assert 'Error: image library/nonexisting-image:latest not found' in result.stderr
 
     def test_build_plain(self):
-        self.command.base_dir = 'tests/fixtures/simple-dockerfile'
-        self.command.dispatch(['build', 'simple'], None)
+        self.base_dir = 'tests/fixtures/simple-dockerfile'
+        self.dispatch(['build', 'simple'])
 
-        cache_indicator = 'Using cache'
-        pull_indicator = 'Status: Image is up to date for busybox:latest'
-
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['build', 'simple'], None)
-        output = mock_stdout.getvalue()
-        self.assertIn(cache_indicator, output)
-        self.assertNotIn(pull_indicator, output)
+        result = self.dispatch(['build', 'simple'])
+        assert BUILD_CACHE_TEXT in result.stdout
+        assert BUILD_PULL_TEXT not in result.stdout
 
     def test_build_no_cache(self):
-        self.command.base_dir = 'tests/fixtures/simple-dockerfile'
-        self.command.dispatch(['build', 'simple'], None)
+        self.base_dir = 'tests/fixtures/simple-dockerfile'
+        self.dispatch(['build', 'simple'])
 
-        cache_indicator = 'Using cache'
-        pull_indicator = 'Status: Image is up to date for busybox:latest'
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['build', '--no-cache', 'simple'], None)
-        output = mock_stdout.getvalue()
-        self.assertNotIn(cache_indicator, output)
-        self.assertNotIn(pull_indicator, output)
+        result = self.dispatch(['build', '--no-cache', 'simple'])
+        assert BUILD_CACHE_TEXT not in result.stdout
+        assert BUILD_PULL_TEXT not in result.stdout
 
     def test_build_pull(self):
-        self.command.base_dir = 'tests/fixtures/simple-dockerfile'
-        self.command.dispatch(['build', 'simple'], None)
+        self.base_dir = 'tests/fixtures/simple-dockerfile'
+        self.dispatch(['build', 'simple'], None)
 
-        cache_indicator = 'Using cache'
-        pull_indicator = 'Status: Image is up to date for busybox:latest'
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['build', '--pull', 'simple'], None)
-        output = mock_stdout.getvalue()
-        self.assertIn(cache_indicator, output)
-        self.assertIn(pull_indicator, output)
+        result = self.dispatch(['build', '--pull', 'simple'])
+        assert BUILD_CACHE_TEXT in result.stdout
+        assert BUILD_PULL_TEXT in result.stdout
 
     def test_build_no_cache_pull(self):
-        self.command.base_dir = 'tests/fixtures/simple-dockerfile'
-        self.command.dispatch(['build', 'simple'], None)
+        self.base_dir = 'tests/fixtures/simple-dockerfile'
+        self.dispatch(['build', 'simple'])
 
-        cache_indicator = 'Using cache'
-        pull_indicator = 'Status: Image is up to date for busybox:latest'
-        with mock.patch('sys.stdout', new_callable=StringIO) as mock_stdout:
-            self.command.dispatch(['build', '--no-cache', '--pull', 'simple'], None)
-        output = mock_stdout.getvalue()
-        self.assertNotIn(cache_indicator, output)
-        self.assertIn(pull_indicator, output)
+        result = self.dispatch(['build', '--no-cache', '--pull', 'simple'])
+        assert BUILD_CACHE_TEXT not in result.stdout
+        assert BUILD_PULL_TEXT in result.stdout
+
+    def test_build_failed(self):
+        self.base_dir = 'tests/fixtures/simple-failing-dockerfile'
+        self.dispatch(['build', 'simple'], returncode=1)
+
+        labels = ["com.docker.compose.test_failing_image=true"]
+        containers = [
+            Container.from_ps(self.project.client, c)
+            for c in self.project.client.containers(
+                all=True,
+                filters={"label": labels})
+        ]
+        assert len(containers) == 1
+
+    def test_build_failed_forcerm(self):
+        self.base_dir = 'tests/fixtures/simple-failing-dockerfile'
+        self.dispatch(['build', '--force-rm', 'simple'], returncode=1)
+
+        labels = ["com.docker.compose.test_failing_image=true"]
+
+        containers = [
+            Container.from_ps(self.project.client, c)
+            for c in self.project.client.containers(
+                all=True,
+                filters={"label": labels})
+        ]
+        assert not containers
 
     def test_up_detached(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'])
         service = self.project.get_service('simple')
         another = self.project.get_service('another')
         self.assertEqual(len(service.containers()), 1)
@@ -169,28 +187,17 @@ class CLITestCase(DockerClientTestCase):
         self.assertFalse(container.get('Config.AttachStdin'))
 
     def test_up_attached(self):
-        with mock.patch(
-            'compose.cli.main.attach_to_logs',
-            autospec=True
-        ) as mock_attach:
-            self.command.dispatch(['up'], None)
-            _, args, kwargs = mock_attach.mock_calls[0]
-            _project, log_printer, _names, _timeout = args
+        self.base_dir = 'tests/fixtures/echo-services'
+        result = self.dispatch(['up', '--no-color'])
 
-        service = self.project.get_service('simple')
-        another = self.project.get_service('another')
-        self.assertEqual(len(service.containers()), 1)
-        self.assertEqual(len(another.containers()), 1)
-        self.assertEqual(
-            set(log_printer.containers),
-            set(self.project.containers())
-        )
+        assert 'simple_1  | simple' in result.stdout
+        assert 'another_1 | another' in result.stdout
 
     def test_up_without_networking(self):
         self.require_api_version('1.21')
 
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['up', '-d'], None)
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['up', '-d'], None)
         client = docker_client(version='1.21')
 
         networks = client.networks(names=[self.project.name])
@@ -207,8 +214,8 @@ class CLITestCase(DockerClientTestCase):
     def test_up_with_networking(self):
         self.require_api_version('1.21')
 
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['--x-networking', 'up', '-d'], None)
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['--x-networking', 'up', '-d'], None)
         client = docker_client(version='1.21')
 
         services = self.project.get_services()
@@ -226,14 +233,13 @@ class CLITestCase(DockerClientTestCase):
             containers = service.containers()
             self.assertEqual(len(containers), 1)
             self.assertIn(containers[0].id, network['Containers'])
-            self.assertEqual(containers[0].get('Config.Hostname'), service.name)
 
         web_container = self.project.get_service('web').containers()[0]
         self.assertFalse(web_container.get('HostConfig.Links'))
 
     def test_up_with_links(self):
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['up', '-d', 'web'], None)
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['up', '-d', 'web'], None)
         web = self.project.get_service('web')
         db = self.project.get_service('db')
         console = self.project.get_service('console')
@@ -242,8 +248,8 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(len(console.containers()), 0)
 
     def test_up_with_no_deps(self):
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['up', '-d', '--no-deps', 'web'], None)
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['up', '-d', '--no-deps', 'web'], None)
         web = self.project.get_service('web')
         db = self.project.get_service('db')
         console = self.project.get_service('console')
@@ -252,13 +258,13 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(len(console.containers()), 0)
 
     def test_up_with_force_recreate(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
         self.assertEqual(len(service.containers()), 1)
 
         old_ids = [c.id for c in service.containers()]
 
-        self.command.dispatch(['up', '-d', '--force-recreate'], None)
+        self.dispatch(['up', '-d', '--force-recreate'], None)
         self.assertEqual(len(service.containers()), 1)
 
         new_ids = [c.id for c in service.containers()]
@@ -266,13 +272,13 @@ class CLITestCase(DockerClientTestCase):
         self.assertNotEqual(old_ids, new_ids)
 
     def test_up_with_no_recreate(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
         self.assertEqual(len(service.containers()), 1)
 
         old_ids = [c.id for c in service.containers()]
 
-        self.command.dispatch(['up', '-d', '--no-recreate'], None)
+        self.dispatch(['up', '-d', '--no-recreate'], None)
         self.assertEqual(len(service.containers()), 1)
 
         new_ids = [c.id for c in service.containers()]
@@ -280,11 +286,12 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(old_ids, new_ids)
 
     def test_up_with_force_recreate_and_no_recreate(self):
-        with self.assertRaises(UserError):
-            self.command.dispatch(['up', '-d', '--force-recreate', '--no-recreate'], None)
+        self.dispatch(
+            ['up', '-d', '--force-recreate', '--no-recreate'],
+            returncode=1)
 
     def test_up_with_timeout(self):
-        self.command.dispatch(['up', '-d', '-t', '1'], None)
+        self.dispatch(['up', '-d', '-t', '1'], None)
         service = self.project.get_service('simple')
         another = self.project.get_service('another')
         self.assertEqual(len(service.containers()), 1)
@@ -296,10 +303,9 @@ class CLITestCase(DockerClientTestCase):
         self.assertFalse(config['AttachStdout'])
         self.assertFalse(config['AttachStdin'])
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_without_links(self, mock_stdout):
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['run', 'console', '/bin/true'], None)
+    def test_run_service_without_links(self):
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['run', 'console', '/bin/true'])
         self.assertEqual(len(self.project.containers()), 0)
 
         # Ensure stdin/out was open
@@ -309,44 +315,40 @@ class CLITestCase(DockerClientTestCase):
         self.assertTrue(config['AttachStdout'])
         self.assertTrue(config['AttachStdin'])
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_links(self, _):
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['run', 'web', '/bin/true'], None)
+    def test_run_service_with_links(self):
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['run', 'web', '/bin/true'], None)
         db = self.project.get_service('db')
         console = self.project.get_service('console')
         self.assertEqual(len(db.containers()), 1)
         self.assertEqual(len(console.containers()), 0)
 
-    @mock.patch('dockerpty.start')
-    def test_run_with_no_deps(self, _):
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['run', '--no-deps', 'web', '/bin/true'], None)
+    def test_run_with_no_deps(self):
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['run', '--no-deps', 'web', '/bin/true'])
         db = self.project.get_service('db')
         self.assertEqual(len(db.containers()), 0)
 
-    @mock.patch('dockerpty.start')
-    def test_run_does_not_recreate_linked_containers(self, _):
-        self.command.base_dir = 'tests/fixtures/links-composefile'
-        self.command.dispatch(['up', '-d', 'db'], None)
+    def test_run_does_not_recreate_linked_containers(self):
+        self.base_dir = 'tests/fixtures/links-composefile'
+        self.dispatch(['up', '-d', 'db'])
         db = self.project.get_service('db')
         self.assertEqual(len(db.containers()), 1)
 
         old_ids = [c.id for c in db.containers()]
 
-        self.command.dispatch(['run', 'web', '/bin/true'], None)
+        self.dispatch(['run', 'web', '/bin/true'], None)
         self.assertEqual(len(db.containers()), 1)
 
         new_ids = [c.id for c in db.containers()]
 
         self.assertEqual(old_ids, new_ids)
 
-    @mock.patch('dockerpty.start')
-    def test_run_without_command(self, _):
-        self.command.base_dir = 'tests/fixtures/commands-composefile'
+    def test_run_without_command(self):
+        self.base_dir = 'tests/fixtures/commands-composefile'
         self.check_build('tests/fixtures/simple-dockerfile', tag='composetest_test')
 
-        self.command.dispatch(['run', 'implicit'], None)
+        self.dispatch(['run', 'implicit'])
         service = self.project.get_service('implicit')
         containers = service.containers(stopped=True, one_off=True)
         self.assertEqual(
@@ -354,7 +356,7 @@ class CLITestCase(DockerClientTestCase):
             [u'/bin/sh -c echo "success"'],
         )
 
-        self.command.dispatch(['run', 'explicit'], None)
+        self.dispatch(['run', 'explicit'])
         service = self.project.get_service('explicit')
         containers = service.containers(stopped=True, one_off=True)
         self.assertEqual(
@@ -362,14 +364,10 @@ class CLITestCase(DockerClientTestCase):
             [u'/bin/true'],
         )
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_entrypoint_overridden(self, _):
-        self.command.base_dir = 'tests/fixtures/dockerfile_with_entrypoint'
+    def test_run_service_with_entrypoint_overridden(self):
+        self.base_dir = 'tests/fixtures/dockerfile_with_entrypoint'
         name = 'service'
-        self.command.dispatch(
-            ['run', '--entrypoint', '/bin/echo', name, 'helloworld'],
-            None
-        )
+        self.dispatch(['run', '--entrypoint', '/bin/echo', name, 'helloworld'])
         service = self.project.get_service(name)
         container = service.containers(stopped=True, one_off=True)[0]
         self.assertEqual(
@@ -377,37 +375,34 @@ class CLITestCase(DockerClientTestCase):
             [u'/bin/echo', u'helloworld'],
         )
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_user_overridden(self, _):
-        self.command.base_dir = 'tests/fixtures/user-composefile'
+    def test_run_service_with_user_overridden(self):
+        self.base_dir = 'tests/fixtures/user-composefile'
         name = 'service'
         user = 'sshd'
-        args = ['run', '--user={user}'.format(user=user), name]
-        self.command.dispatch(args, None)
+        self.dispatch(['run', '--user={user}'.format(user=user), name], returncode=1)
         service = self.project.get_service(name)
         container = service.containers(stopped=True, one_off=True)[0]
         self.assertEqual(user, container.get('Config.User'))
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_user_overridden_short_form(self, _):
-        self.command.base_dir = 'tests/fixtures/user-composefile'
+    def test_run_service_with_user_overridden_short_form(self):
+        self.base_dir = 'tests/fixtures/user-composefile'
         name = 'service'
         user = 'sshd'
-        args = ['run', '-u', user, name]
-        self.command.dispatch(args, None)
+        self.dispatch(['run', '-u', user, name], returncode=1)
         service = self.project.get_service(name)
         container = service.containers(stopped=True, one_off=True)[0]
         self.assertEqual(user, container.get('Config.User'))
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_environement_overridden(self, _):
+    def test_run_service_with_environement_overridden(self):
         name = 'service'
-        self.command.base_dir = 'tests/fixtures/environment-composefile'
-        self.command.dispatch(
-            ['run', '-e', 'foo=notbar', '-e', 'allo=moto=bobo',
-             '-e', 'alpha=beta', name],
-            None
-        )
+        self.base_dir = 'tests/fixtures/environment-composefile'
+        self.dispatch([
+            'run', '-e', 'foo=notbar',
+            '-e', 'allo=moto=bobo',
+            '-e', 'alpha=beta',
+            name,
+            '/bin/true',
+        ])
         service = self.project.get_service(name)
         container = service.containers(stopped=True, one_off=True)[0]
         # env overriden
@@ -419,11 +414,10 @@ class CLITestCase(DockerClientTestCase):
         # make sure a value with a = don't crash out
         self.assertEqual('moto=bobo', container.environment['allo'])
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_without_map_ports(self, _):
+    def test_run_service_without_map_ports(self):
         # create one off container
-        self.command.base_dir = 'tests/fixtures/ports-composefile'
-        self.command.dispatch(['run', '-d', 'simple'], None)
+        self.base_dir = 'tests/fixtures/ports-composefile'
+        self.dispatch(['run', '-d', 'simple'])
         container = self.project.get_service('simple').containers(one_off=True)[0]
 
         # get port information
@@ -437,12 +431,10 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(port_random, None)
         self.assertEqual(port_assigned, None)
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_map_ports(self, _):
-
+    def test_run_service_with_map_ports(self):
         # create one off container
-        self.command.base_dir = 'tests/fixtures/ports-composefile'
-        self.command.dispatch(['run', '-d', '--service-ports', 'simple'], None)
+        self.base_dir = 'tests/fixtures/ports-composefile'
+        self.dispatch(['run', '-d', '--service-ports', 'simple'])
         container = self.project.get_service('simple').containers(one_off=True)[0]
 
         # get port information
@@ -460,12 +452,10 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(port_range[0], "0.0.0.0:49153")
         self.assertEqual(port_range[1], "0.0.0.0:49154")
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_explicitly_maped_ports(self, _):
-
+    def test_run_service_with_explicitly_maped_ports(self):
         # create one off container
-        self.command.base_dir = 'tests/fixtures/ports-composefile'
-        self.command.dispatch(['run', '-d', '-p', '30000:3000', '--publish', '30001:3001', 'simple'], None)
+        self.base_dir = 'tests/fixtures/ports-composefile'
+        self.dispatch(['run', '-d', '-p', '30000:3000', '--publish', '30001:3001', 'simple'])
         container = self.project.get_service('simple').containers(one_off=True)[0]
 
         # get port information
@@ -479,12 +469,10 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(port_short, "0.0.0.0:30000")
         self.assertEqual(port_full, "0.0.0.0:30001")
 
-    @mock.patch('dockerpty.start')
-    def test_run_service_with_explicitly_maped_ip_ports(self, _):
-
+    def test_run_service_with_explicitly_maped_ip_ports(self):
         # create one off container
-        self.command.base_dir = 'tests/fixtures/ports-composefile'
-        self.command.dispatch(['run', '-d', '-p', '127.0.0.1:30000:3000', '--publish', '127.0.0.1:30001:3001', 'simple'], None)
+        self.base_dir = 'tests/fixtures/ports-composefile'
+        self.dispatch(['run', '-d', '-p', '127.0.0.1:30000:3000', '--publish', '127.0.0.1:30001:3001', 'simple'], None)
         container = self.project.get_service('simple').containers(one_off=True)[0]
 
         # get port information
@@ -498,22 +486,20 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(port_short, "127.0.0.1:30000")
         self.assertEqual(port_full, "127.0.0.1:30001")
 
-    @mock.patch('dockerpty.start')
-    def test_run_with_custom_name(self, _):
-        self.command.base_dir = 'tests/fixtures/environment-composefile'
+    def test_run_with_custom_name(self):
+        self.base_dir = 'tests/fixtures/environment-composefile'
         name = 'the-container-name'
-        self.command.dispatch(['run', '--name', name, 'service'], None)
+        self.dispatch(['run', '--name', name, 'service', '/bin/true'])
 
         service = self.project.get_service('service')
         container, = service.containers(stopped=True, one_off=True)
         self.assertEqual(container.name, name)
 
-    @mock.patch('dockerpty.start')
-    def test_run_with_networking(self, _):
+    def test_run_with_networking(self):
         self.require_api_version('1.21')
         client = docker_client(version='1.21')
-        self.command.base_dir = 'tests/fixtures/simple-dockerfile'
-        self.command.dispatch(['--x-networking', 'run', 'simple', 'true'], None)
+        self.base_dir = 'tests/fixtures/simple-dockerfile'
+        self.dispatch(['--x-networking', 'run', 'simple', 'true'], None)
         service = self.project.get_service('simple')
         container, = service.containers(stopped=True, one_off=True)
         networks = client.networks(names=[self.project.name])
@@ -527,71 +513,70 @@ class CLITestCase(DockerClientTestCase):
         service.create_container()
         service.kill()
         self.assertEqual(len(service.containers(stopped=True)), 1)
-        self.command.dispatch(['rm', '--force'], None)
+        self.dispatch(['rm', '--force'], None)
         self.assertEqual(len(service.containers(stopped=True)), 0)
         service = self.project.get_service('simple')
         service.create_container()
         service.kill()
         self.assertEqual(len(service.containers(stopped=True)), 1)
-        self.command.dispatch(['rm', '-f'], None)
+        self.dispatch(['rm', '-f'], None)
         self.assertEqual(len(service.containers(stopped=True)), 0)
 
     def test_stop(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
         self.assertEqual(len(service.containers()), 1)
         self.assertTrue(service.containers()[0].is_running)
 
-        self.command.dispatch(['stop', '-t', '1'], None)
+        self.dispatch(['stop', '-t', '1'], None)
 
         self.assertEqual(len(service.containers(stopped=True)), 1)
         self.assertFalse(service.containers(stopped=True)[0].is_running)
 
     def test_pause_unpause(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
         self.assertFalse(service.containers()[0].is_paused)
 
-        self.command.dispatch(['pause'], None)
+        self.dispatch(['pause'], None)
         self.assertTrue(service.containers()[0].is_paused)
 
-        self.command.dispatch(['unpause'], None)
+        self.dispatch(['unpause'], None)
         self.assertFalse(service.containers()[0].is_paused)
 
     def test_logs_invalid_service_name(self):
-        with self.assertRaises(NoSuchService):
-            self.command.dispatch(['logs', 'madeupname'], None)
+        self.dispatch(['logs', 'madeupname'], returncode=1)
 
     def test_kill(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
         self.assertEqual(len(service.containers()), 1)
         self.assertTrue(service.containers()[0].is_running)
 
-        self.command.dispatch(['kill'], None)
+        self.dispatch(['kill'], None)
 
         self.assertEqual(len(service.containers(stopped=True)), 1)
         self.assertFalse(service.containers(stopped=True)[0].is_running)
 
     def test_kill_signal_sigstop(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
         self.assertEqual(len(service.containers()), 1)
         self.assertTrue(service.containers()[0].is_running)
 
-        self.command.dispatch(['kill', '-s', 'SIGSTOP'], None)
+        self.dispatch(['kill', '-s', 'SIGSTOP'], None)
 
         self.assertEqual(len(service.containers()), 1)
         # The container is still running. It has only been paused
         self.assertTrue(service.containers()[0].is_running)
 
     def test_kill_stopped_service(self):
-        self.command.dispatch(['up', '-d'], None)
+        self.dispatch(['up', '-d'], None)
         service = self.project.get_service('simple')
-        self.command.dispatch(['kill', '-s', 'SIGSTOP'], None)
+        self.dispatch(['kill', '-s', 'SIGSTOP'], None)
         self.assertTrue(service.containers()[0].is_running)
 
-        self.command.dispatch(['kill', '-s', 'SIGKILL'], None)
+        self.dispatch(['kill', '-s', 'SIGKILL'], None)
 
         self.assertEqual(len(service.containers(stopped=True)), 1)
         self.assertFalse(service.containers(stopped=True)[0].is_running)
@@ -599,9 +584,9 @@ class CLITestCase(DockerClientTestCase):
     def test_restart(self):
         service = self.project.get_service('simple')
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         started_at = container.dictionary['State']['StartedAt']
-        self.command.dispatch(['restart', '-t', '1'], None)
+        self.dispatch(['restart', '-t', '1'], None)
         container.inspect()
         self.assertNotEqual(
             container.dictionary['State']['FinishedAt'],
@@ -615,53 +600,51 @@ class CLITestCase(DockerClientTestCase):
     def test_scale(self):
         project = self.project
 
-        self.command.scale(project, {'SERVICE=NUM': ['simple=1']})
+        self.dispatch(['scale', 'simple=1'])
         self.assertEqual(len(project.get_service('simple').containers()), 1)
 
-        self.command.scale(project, {'SERVICE=NUM': ['simple=3', 'another=2']})
+        self.dispatch(['scale', 'simple=3', 'another=2'])
         self.assertEqual(len(project.get_service('simple').containers()), 3)
         self.assertEqual(len(project.get_service('another').containers()), 2)
 
-        self.command.scale(project, {'SERVICE=NUM': ['simple=1', 'another=1']})
+        self.dispatch(['scale', 'simple=1', 'another=1'])
         self.assertEqual(len(project.get_service('simple').containers()), 1)
         self.assertEqual(len(project.get_service('another').containers()), 1)
 
-        self.command.scale(project, {'SERVICE=NUM': ['simple=1', 'another=1']})
+        self.dispatch(['scale', 'simple=1', 'another=1'])
         self.assertEqual(len(project.get_service('simple').containers()), 1)
         self.assertEqual(len(project.get_service('another').containers()), 1)
 
-        self.command.scale(project, {'SERVICE=NUM': ['simple=0', 'another=0']})
+        self.dispatch(['scale', 'simple=0', 'another=0'])
         self.assertEqual(len(project.get_service('simple').containers()), 0)
         self.assertEqual(len(project.get_service('another').containers()), 0)
 
     def test_port(self):
-        self.command.base_dir = 'tests/fixtures/ports-composefile'
-        self.command.dispatch(['up', '-d'], None)
+        self.base_dir = 'tests/fixtures/ports-composefile'
+        self.dispatch(['up', '-d'], None)
         container = self.project.get_service('simple').get_container()
 
-        @mock.patch('sys.stdout', new_callable=StringIO)
-        def get_port(number, mock_stdout):
-            self.command.dispatch(['port', 'simple', str(number)], None)
-            return mock_stdout.getvalue().rstrip()
+        def get_port(number):
+            result = self.dispatch(['port', 'simple', str(number)])
+            return result.stdout.rstrip()
 
         self.assertEqual(get_port(3000), container.get_local_port(3000))
         self.assertEqual(get_port(3001), "0.0.0.0:49152")
         self.assertEqual(get_port(3002), "0.0.0.0:49153")
 
     def test_port_with_scale(self):
-        self.command.base_dir = 'tests/fixtures/ports-composefile-scale'
-        self.command.dispatch(['scale', 'simple=2'], None)
+        self.base_dir = 'tests/fixtures/ports-composefile-scale'
+        self.dispatch(['scale', 'simple=2'], None)
         containers = sorted(
             self.project.containers(service_names=['simple']),
             key=attrgetter('name'))
 
-        @mock.patch('sys.stdout', new_callable=StringIO)
-        def get_port(number, mock_stdout, index=None):
+        def get_port(number, index=None):
             if index is None:
-                self.command.dispatch(['port', 'simple', str(number)], None)
+                result = self.dispatch(['port', 'simple', str(number)])
             else:
-                self.command.dispatch(['port', '--index=' + str(index), 'simple', str(number)], None)
-            return mock_stdout.getvalue().rstrip()
+                result = self.dispatch(['port', '--index=' + str(index), 'simple', str(number)])
+            return result.stdout.rstrip()
 
         self.assertEqual(get_port(3000), containers[0].get_local_port(3000))
         self.assertEqual(get_port(3000, index=1), containers[0].get_local_port(3000))
@@ -670,8 +653,8 @@ class CLITestCase(DockerClientTestCase):
 
     def test_env_file_relative_to_compose_file(self):
         config_path = os.path.abspath('tests/fixtures/env-file/docker-compose.yml')
-        self.command.dispatch(['-f', config_path, 'up', '-d'], None)
-        self._project = get_project(self.command.base_dir, [config_path])
+        self.dispatch(['-f', config_path, 'up', '-d'], None)
+        self._project = get_project(self.base_dir, [config_path])
 
         containers = self.project.containers(stopped=True)
         self.assertEqual(len(containers), 1)
@@ -681,20 +664,18 @@ class CLITestCase(DockerClientTestCase):
     def test_home_and_env_var_in_volume_path(self):
         os.environ['VOLUME_NAME'] = 'my-volume'
         os.environ['HOME'] = '/tmp/home-dir'
-        expected_host_path = os.path.join(os.environ['HOME'], os.environ['VOLUME_NAME'])
 
-        self.command.base_dir = 'tests/fixtures/volume-path-interpolation'
-        self.command.dispatch(['up', '-d'], None)
+        self.base_dir = 'tests/fixtures/volume-path-interpolation'
+        self.dispatch(['up', '-d'], None)
 
         container = self.project.containers(stopped=True)[0]
         actual_host_path = container.get('Volumes')['/container-path']
         components = actual_host_path.split('/')
-        self.assertTrue(components[-2:] == ['home-dir', 'my-volume'],
-                        msg="Last two components differ: %s, %s" % (actual_host_path, expected_host_path))
+        assert components[-2:] == ['home-dir', 'my-volume']
 
     def test_up_with_default_override_file(self):
-        self.command.base_dir = 'tests/fixtures/override-files'
-        self.command.dispatch(['up', '-d'], None)
+        self.base_dir = 'tests/fixtures/override-files'
+        self.dispatch(['up', '-d'], None)
 
         containers = self.project.containers()
         self.assertEqual(len(containers), 2)
@@ -704,15 +685,15 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(db.human_readable_command, 'top')
 
     def test_up_with_multiple_files(self):
-        self.command.base_dir = 'tests/fixtures/override-files'
+        self.base_dir = 'tests/fixtures/override-files'
         config_paths = [
             'docker-compose.yml',
             'docker-compose.override.yml',
             'extra.yml',
 
         ]
-        self._project = get_project(self.command.base_dir, config_paths)
-        self.command.dispatch(
+        self._project = get_project(self.base_dir, config_paths)
+        self.dispatch(
             [
                 '-f', config_paths[0],
                 '-f', config_paths[1],
@@ -731,8 +712,8 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(other.human_readable_command, 'top')
 
     def test_up_with_extends(self):
-        self.command.base_dir = 'tests/fixtures/extends'
-        self.command.dispatch(['up', '-d'], None)
+        self.base_dir = 'tests/fixtures/extends'
+        self.dispatch(['up', '-d'], None)
 
         self.assertEqual(
             set([s.name for s in self.project.services]),
diff --git a/tests/fixtures/echo-services/docker-compose.yml b/tests/fixtures/echo-services/docker-compose.yml
new file mode 100644
index 0000000000..8014f3d916
--- /dev/null
+++ b/tests/fixtures/echo-services/docker-compose.yml
@@ -0,0 +1,6 @@
+simple:
+  image: busybox:latest
+  command: echo simple
+another:
+  image: busybox:latest
+  command: echo another
diff --git a/tests/fixtures/extends/circle-1.yml b/tests/fixtures/extends/circle-1.yml
index a034e9619e..d88ea61d0e 100644
--- a/tests/fixtures/extends/circle-1.yml
+++ b/tests/fixtures/extends/circle-1.yml
@@ -5,7 +5,7 @@ bar:
 web:
   extends:
     file: circle-2.yml
-    service: web
+    service: other
 baz:
   image: busybox
 quux:
diff --git a/tests/fixtures/extends/circle-2.yml b/tests/fixtures/extends/circle-2.yml
index fa6ddefcc3..de05bc8da0 100644
--- a/tests/fixtures/extends/circle-2.yml
+++ b/tests/fixtures/extends/circle-2.yml
@@ -2,7 +2,7 @@ foo:
   image: busybox
 bar:
   image: busybox
-web:
+other:
   extends:
     file: circle-1.yml
     service: web
diff --git a/tests/fixtures/simple-failing-dockerfile/Dockerfile b/tests/fixtures/simple-failing-dockerfile/Dockerfile
new file mode 100644
index 0000000000..c2d06b1672
--- /dev/null
+++ b/tests/fixtures/simple-failing-dockerfile/Dockerfile
@@ -0,0 +1,7 @@
+FROM busybox:latest
+LABEL com.docker.compose.test_image=true
+LABEL com.docker.compose.test_failing_image=true
+# With the following label the container wil be cleaned up automatically
+# Must be kept in sync with LABEL_PROJECT from compose/const.py
+LABEL com.docker.compose.project=composetest
+RUN exit 1
diff --git a/tests/fixtures/simple-failing-dockerfile/docker-compose.yml b/tests/fixtures/simple-failing-dockerfile/docker-compose.yml
new file mode 100644
index 0000000000..b0357541ee
--- /dev/null
+++ b/tests/fixtures/simple-failing-dockerfile/docker-compose.yml
@@ -0,0 +1,2 @@
+simple:
+  build: .
diff --git a/tests/integration/project_test.py b/tests/integration/project_test.py
index 950523878e..2ce319005f 100644
--- a/tests/integration/project_test.py
+++ b/tests/integration/project_test.py
@@ -7,6 +7,7 @@ from compose.const import LABEL_PROJECT
 from compose.container import Container
 from compose.project import Project
 from compose.service import ConvergenceStrategy
+from compose.service import Net
 from compose.service import VolumeFromSpec
 
 
@@ -111,6 +112,7 @@ class ProjectTest(DockerClientTestCase):
         network_name = 'network_does_exist'
         project = Project(network_name, [], client)
         client.create_network(network_name)
+        self.addCleanup(client.remove_network, network_name)
         assert project.get_network()['Name'] == network_name
 
     def test_net_from_service(self):
@@ -398,6 +400,20 @@ class ProjectTest(DockerClientTestCase):
         self.assertEqual(len(project.get_service('data').containers(stopped=True)), 1)
         self.assertEqual(len(project.get_service('console').containers()), 0)
 
+    def test_project_up_with_custom_network(self):
+        self.require_api_version('1.21')
+        client = docker_client(version='1.21')
+        network_name = 'composetest-custom'
+
+        client.create_network(network_name)
+        self.addCleanup(client.remove_network, network_name)
+
+        web = self.create_service('web', net=Net(network_name))
+        project = Project('composetest', [web], client, use_networking=True)
+        project.up()
+
+        assert project.get_network() is None
+
     def test_unscale_after_restart(self):
         web = self.create_service('web')
         project = Project('composetest', [web], self.client)
diff --git a/tests/integration/resilience_test.py b/tests/integration/resilience_test.py
index befd72c7f8..53aedfecf2 100644
--- a/tests/integration/resilience_test.py
+++ b/tests/integration/resilience_test.py
@@ -13,7 +13,7 @@ class ResilienceTest(DockerClientTestCase):
         self.project = Project('composetest', [self.db], self.client)
 
         container = self.db.create_container()
-        self.db.start_container(container)
+        container.start()
         self.host_path = container.get('Volumes')['/var/db']
 
     def test_successful_recreate(self):
@@ -31,7 +31,7 @@ class ResilienceTest(DockerClientTestCase):
         self.assertEqual(container.get('Volumes')['/var/db'], self.host_path)
 
     def test_start_failure(self):
-        with mock.patch('compose.service.Service.start_container', crash):
+        with mock.patch('compose.container.Container.start', crash):
             with self.assertRaises(Crash):
                 self.project.up(strategy=ConvergenceStrategy.always)
 
diff --git a/tests/integration/service_test.py b/tests/integration/service_test.py
index 4ac04545e1..aaa4f01ec0 100644
--- a/tests/integration/service_test.py
+++ b/tests/integration/service_test.py
@@ -14,6 +14,7 @@ from .. import mock
 from .testcases import DockerClientTestCase
 from .testcases import pull_busybox
 from compose import __version__
+from compose.const import LABEL_CONFIG_HASH
 from compose.const import LABEL_CONTAINER_NUMBER
 from compose.const import LABEL_ONE_OFF
 from compose.const import LABEL_PROJECT
@@ -23,6 +24,7 @@ from compose.container import Container
 from compose.service import build_extra_hosts
 from compose.service import ConfigError
 from compose.service import ConvergencePlan
+from compose.service import ConvergenceStrategy
 from compose.service import Net
 from compose.service import Service
 from compose.service import VolumeFromSpec
@@ -30,7 +32,8 @@ from compose.service import VolumeFromSpec
 
 def create_and_start_container(service, **override_options):
     container = service.create_container(**override_options)
-    return service.start_container(container)
+    container.start()
+    return container
 
 
 class ServiceTest(DockerClientTestCase):
@@ -115,19 +118,19 @@ class ServiceTest(DockerClientTestCase):
     def test_create_container_with_unspecified_volume(self):
         service = self.create_service('db', volumes=['/var/db'])
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertIn('/var/db', container.get('Volumes'))
 
     def test_create_container_with_volume_driver(self):
         service = self.create_service('db', volume_driver='foodriver')
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual('foodriver', container.get('Config.VolumeDriver'))
 
     def test_create_container_with_cpu_shares(self):
         service = self.create_service('db', cpu_shares=73)
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(container.get('HostConfig.CpuShares'), 73)
 
     def test_build_extra_hosts(self):
@@ -165,7 +168,7 @@ class ServiceTest(DockerClientTestCase):
         extra_hosts = ['somehost:162.242.195.82', 'otherhost:50.31.209.229']
         service = self.create_service('db', extra_hosts=extra_hosts)
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(set(container.get('HostConfig.ExtraHosts')), set(extra_hosts))
 
     def test_create_container_with_extra_hosts_dicts(self):
@@ -173,33 +176,33 @@ class ServiceTest(DockerClientTestCase):
         extra_hosts_list = ['somehost:162.242.195.82', 'otherhost:50.31.209.229']
         service = self.create_service('db', extra_hosts=extra_hosts)
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(set(container.get('HostConfig.ExtraHosts')), set(extra_hosts_list))
 
     def test_create_container_with_cpu_set(self):
         service = self.create_service('db', cpuset='0')
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(container.get('HostConfig.CpusetCpus'), '0')
 
     def test_create_container_with_read_only_root_fs(self):
         read_only = True
         service = self.create_service('db', read_only=read_only)
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(container.get('HostConfig.ReadonlyRootfs'), read_only, container.get('HostConfig'))
 
     def test_create_container_with_security_opt(self):
         security_opt = ['label:disable']
         service = self.create_service('db', security_opt=security_opt)
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(set(container.get('HostConfig.SecurityOpt')), set(security_opt))
 
     def test_create_container_with_mac_address(self):
         service = self.create_service('db', mac_address='02:42:ac:11:65:43')
         container = service.create_container()
-        service.start_container(container)
+        container.start()
         self.assertEqual(container.inspect()['Config']['MacAddress'], '02:42:ac:11:65:43')
 
     def test_create_container_with_specified_volume(self):
@@ -208,7 +211,7 @@ class ServiceTest(DockerClientTestCase):
 
         service = self.create_service('db', volumes=['%s:%s' % (host_path, container_path)])
         container = service.create_container()
-        service.start_container(container)
+        container.start()
 
         volumes = container.inspect()['Volumes']
         self.assertIn(container_path, volumes)
@@ -281,7 +284,7 @@ class ServiceTest(DockerClientTestCase):
             ]
         )
         host_container = host_service.create_container()
-        host_service.start_container(host_container)
+        host_container.start()
         self.assertIn(volume_container_1.id + ':rw',
                       host_container.get('HostConfig.VolumesFrom'))
         self.assertIn(volume_container_2.id + ':rw',
@@ -300,7 +303,7 @@ class ServiceTest(DockerClientTestCase):
         self.assertEqual(old_container.get('Config.Cmd'), ['-d', '1'])
         self.assertIn('FOO=1', old_container.get('Config.Env'))
         self.assertEqual(old_container.name, 'composetest_db_1')
-        service.start_container(old_container)
+        old_container.start()
         old_container.inspect()  # reload volume data
         volume_path = old_container.get('Volumes')['/etc']
 
@@ -366,6 +369,33 @@ class ServiceTest(DockerClientTestCase):
         self.assertEqual(list(new_container.get('Volumes')), ['/data'])
         self.assertEqual(new_container.get('Volumes')['/data'], volume_path)
 
+    def test_execute_convergence_plan_when_image_volume_masks_config(self):
+        service = Service(
+            project='composetest',
+            name='db',
+            client=self.client,
+            build='tests/fixtures/dockerfile-with-volume',
+        )
+
+        old_container = create_and_start_container(service)
+        self.assertEqual(list(old_container.get('Volumes').keys()), ['/data'])
+        volume_path = old_container.get('Volumes')['/data']
+
+        service.options['volumes'] = ['/tmp:/data']
+
+        with mock.patch('compose.service.log') as mock_log:
+            new_container, = service.execute_convergence_plan(
+                ConvergencePlan('recreate', [old_container]))
+
+        mock_log.warn.assert_called_once_with(mock.ANY)
+        _, args, kwargs = mock_log.warn.mock_calls[0]
+        self.assertIn(
+            "Service \"db\" is using volume \"/data\" from the previous container",
+            args[0])
+
+        self.assertEqual(list(new_container.get('Volumes')), ['/data'])
+        self.assertEqual(new_container.get('Volumes')['/data'], volume_path)
+
     def test_start_container_passes_through_options(self):
         db = self.create_service('db')
         create_and_start_container(db, environment={'FOO': 'BAR'})
@@ -812,7 +842,13 @@ class ServiceTest(DockerClientTestCase):
             environment=['ONE=1', 'TWO=2', 'THREE=3'],
             env_file=['tests/fixtures/env/one.env', 'tests/fixtures/env/two.env'])
         env = create_and_start_container(service).environment
-        for k, v in {'ONE': '1', 'TWO': '2', 'THREE': '3', 'FOO': 'baz', 'DOO': 'dah'}.items():
+        for k, v in {
+            'ONE': '1',
+            'TWO': '2',
+            'THREE': '3',
+            'FOO': 'baz',
+            'DOO': 'dah'
+        }.items():
             self.assertEqual(env[k], v)
 
     @mock.patch.dict(os.environ)
@@ -820,9 +856,22 @@ class ServiceTest(DockerClientTestCase):
         os.environ['FILE_DEF'] = 'E1'
         os.environ['FILE_DEF_EMPTY'] = 'E2'
         os.environ['ENV_DEF'] = 'E3'
-        service = self.create_service('web', environment={'FILE_DEF': 'F1', 'FILE_DEF_EMPTY': '', 'ENV_DEF': None, 'NO_DEF': None})
+        service = self.create_service(
+            'web',
+            environment={
+                'FILE_DEF': 'F1',
+                'FILE_DEF_EMPTY': '',
+                'ENV_DEF': None,
+                'NO_DEF': None
+            }
+        )
         env = create_and_start_container(service).environment
-        for k, v in {'FILE_DEF': 'F1', 'FILE_DEF_EMPTY': '', 'ENV_DEF': 'E3', 'NO_DEF': ''}.items():
+        for k, v in {
+            'FILE_DEF': 'F1',
+            'FILE_DEF_EMPTY': '',
+            'ENV_DEF': 'E3',
+            'NO_DEF': ''
+        }.items():
             self.assertEqual(env[k], v)
 
     def test_with_high_enough_api_version_we_get_default_network_mode(self):
@@ -929,3 +978,38 @@ class ServiceTest(DockerClientTestCase):
 
         self.assertEqual(set(service.containers(stopped=True)), set([original, duplicate]))
         self.assertEqual(set(service.duplicate_containers()), set([duplicate]))
+
+
+def converge(service,
+             strategy=ConvergenceStrategy.changed,
+             do_build=True):
+    """Create a converge plan from a strategy and execute the plan."""
+    plan = service.convergence_plan(strategy)
+    return service.execute_convergence_plan(plan, do_build=do_build, timeout=1)
+
+
+class ConfigHashTest(DockerClientTestCase):
+    def test_no_config_hash_when_one_off(self):
+        web = self.create_service('web')
+        container = web.create_container(one_off=True)
+        self.assertNotIn(LABEL_CONFIG_HASH, container.labels)
+
+    def test_no_config_hash_when_overriding_options(self):
+        web = self.create_service('web')
+        container = web.create_container(environment={'FOO': '1'})
+        self.assertNotIn(LABEL_CONFIG_HASH, container.labels)
+
+    def test_config_hash_with_custom_labels(self):
+        web = self.create_service('web', labels={'foo': '1'})
+        container = converge(web)[0]
+        self.assertIn(LABEL_CONFIG_HASH, container.labels)
+        self.assertIn('foo', container.labels)
+
+    def test_config_hash_sticks_around(self):
+        web = self.create_service('web', command=["top"])
+        container = converge(web)[0]
+        self.assertIn(LABEL_CONFIG_HASH, container.labels)
+
+        web = self.create_service('web', command=["top", "-d", "1"])
+        container = converge(web)[0]
+        self.assertIn(LABEL_CONFIG_HASH, container.labels)
diff --git a/tests/integration/state_test.py b/tests/integration/state_test.py
index 3230aefc61..1fecce87b8 100644
--- a/tests/integration/state_test.py
+++ b/tests/integration/state_test.py
@@ -4,13 +4,10 @@ by `docker-compose up`.
 """
 from __future__ import unicode_literals
 
-import os
-import shutil
-import tempfile
+import py
 
 from .testcases import DockerClientTestCase
 from compose.config import config
-from compose.const import LABEL_CONFIG_HASH
 from compose.project import Project
 from compose.service import ConvergenceStrategy
 
@@ -179,13 +176,18 @@ class ProjectWithDependenciesTest(ProjectTestCase):
         containers = self.run_up(next_cfg)
         self.assertEqual(len(containers), 2)
 
+    def test_service_recreated_when_dependency_created(self):
+        containers = self.run_up(self.cfg, service_names=['web'], start_deps=False)
+        self.assertEqual(len(containers), 1)
 
-def converge(service,
-             strategy=ConvergenceStrategy.changed,
-             do_build=True):
-    """Create a converge plan from a strategy and execute the plan."""
-    plan = service.convergence_plan(strategy)
-    return service.execute_convergence_plan(plan, do_build=do_build, timeout=1)
+        containers = self.run_up(self.cfg)
+        self.assertEqual(len(containers), 3)
+
+        web, = [c for c in containers if c.service == 'web']
+        nginx, = [c for c in containers if c.service == 'nginx']
+
+        self.assertEqual(web.links(), ['composetest_db_1', 'db', 'db_1'])
+        self.assertEqual(nginx.links(), ['composetest_web_1', 'web', 'web_1'])
 
 
 class ServiceStateTest(DockerClientTestCase):
@@ -241,67 +243,49 @@ class ServiceStateTest(DockerClientTestCase):
 
         image_id = self.client.images(name='busybox')[0]['Id']
         self.client.tag(image_id, repository=repo, tag=tag)
+        self.addCleanup(self.client.remove_image, image)
 
-        try:
-            web = self.create_service('web', image=image)
-            container = web.create_container()
+        web = self.create_service('web', image=image)
+        container = web.create_container()
 
-            # update the image
-            c = self.client.create_container(image, ['touch', '/hello.txt'])
-            self.client.commit(c, repository=repo, tag=tag)
-            self.client.remove_container(c)
+        # update the image
+        c = self.client.create_container(image, ['touch', '/hello.txt'])
+        self.client.commit(c, repository=repo, tag=tag)
+        self.client.remove_container(c)
 
-            web = self.create_service('web', image=image)
-            self.assertEqual(('recreate', [container]), web.convergence_plan())
-
-        finally:
-            self.client.remove_image(image)
+        web = self.create_service('web', image=image)
+        self.assertEqual(('recreate', [container]), web.convergence_plan())
 
     def test_trigger_recreate_with_build(self):
-        context = tempfile.mkdtemp()
+        context = py.test.ensuretemp('test_trigger_recreate_with_build')
+        self.addCleanup(context.remove)
+
         base_image = "FROM busybox\nLABEL com.docker.compose.test_image=true\n"
+        dockerfile = context.join('Dockerfile')
+        dockerfile.write(base_image)
 
-        try:
-            dockerfile = os.path.join(context, 'Dockerfile')
+        web = self.create_service('web', build=str(context))
+        container = web.create_container()
 
-            with open(dockerfile, 'w') as f:
-                f.write(base_image)
+        dockerfile.write(base_image + 'CMD echo hello world\n')
+        web.build()
 
-            web = self.create_service('web', build=context)
-            container = web.create_container()
+        web = self.create_service('web', build=str(context))
+        self.assertEqual(('recreate', [container]), web.convergence_plan())
 
-            with open(dockerfile, 'w') as f:
-                f.write(base_image + 'CMD echo hello world\n')
-            web.build()
+    def test_image_changed_to_build(self):
+        context = py.test.ensuretemp('test_image_changed_to_build')
+        self.addCleanup(context.remove)
+        context.join('Dockerfile').write("""
+            FROM busybox
+            LABEL com.docker.compose.test_image=true
+        """)
 
-            web = self.create_service('web', build=context)
-            self.assertEqual(('recreate', [container]), web.convergence_plan())
-        finally:
-            shutil.rmtree(context)
+        web = self.create_service('web', image='busybox')
+        container = web.create_container()
 
-
-class ConfigHashTest(DockerClientTestCase):
-    def test_no_config_hash_when_one_off(self):
-        web = self.create_service('web')
-        container = web.create_container(one_off=True)
-        self.assertNotIn(LABEL_CONFIG_HASH, container.labels)
-
-    def test_no_config_hash_when_overriding_options(self):
-        web = self.create_service('web')
-        container = web.create_container(environment={'FOO': '1'})
-        self.assertNotIn(LABEL_CONFIG_HASH, container.labels)
-
-    def test_config_hash_with_custom_labels(self):
-        web = self.create_service('web', labels={'foo': '1'})
-        container = converge(web)[0]
-        self.assertIn(LABEL_CONFIG_HASH, container.labels)
-        self.assertIn('foo', container.labels)
-
-    def test_config_hash_sticks_around(self):
-        web = self.create_service('web', command=["top"])
-        container = converge(web)[0]
-        self.assertIn(LABEL_CONFIG_HASH, container.labels)
-
-        web = self.create_service('web', command=["top", "-d", "1"])
-        container = converge(web)[0]
-        self.assertIn(LABEL_CONFIG_HASH, container.labels)
+        web = self.create_service('web', build=str(context))
+        plan = web.convergence_plan()
+        self.assertEqual(('recreate', [container]), plan)
+        containers = web.execute_convergence_plan(plan)
+        self.assertEqual(len(containers), 1)
diff --git a/tests/integration/testcases.py b/tests/integration/testcases.py
index 686a2b69a4..d63f059160 100644
--- a/tests/integration/testcases.py
+++ b/tests/integration/testcases.py
@@ -7,7 +7,9 @@ from pytest import skip
 
 from .. import unittest
 from compose.cli.docker_client import docker_client
-from compose.config.config import ServiceLoader
+from compose.config.config import process_service
+from compose.config.config import resolve_environment
+from compose.config.config import ServiceConfig
 from compose.const import LABEL_PROJECT
 from compose.progress_stream import stream_output
 from compose.service import Service
@@ -42,34 +44,13 @@ class DockerClientTestCase(unittest.TestCase):
         if 'command' not in kwargs:
             kwargs['command'] = ["top"]
 
-        links = kwargs.get('links', None)
-        volumes_from = kwargs.get('volumes_from', None)
-        net = kwargs.get('net', None)
-
-        workaround_options = ['links', 'volumes_from', 'net']
-        for key in workaround_options:
-            try:
-                del kwargs[key]
-            except KeyError:
-                pass
-
-        options = ServiceLoader(working_dir='.', filename=None, service_name=name, service_dict=kwargs).make_service_dict()
-
+        service_config = ServiceConfig('.', None, name, kwargs)
+        options = process_service(service_config)
+        options['environment'] = resolve_environment('.', kwargs)
         labels = options.setdefault('labels', {})
         labels['com.docker.compose.test-name'] = self.id()
 
-        if links:
-            options['links'] = links
-        if volumes_from:
-            options['volumes_from'] = volumes_from
-        if net:
-            options['net'] = net
-
-        return Service(
-            project='composetest',
-            client=self.client,
-            **options
-        )
+        return Service(name, client=self.client, project='composetest', **options)
 
     def check_build(self, *args, **kwargs):
         kwargs.setdefault('rm', True)
diff --git a/tests/unit/cli/log_printer_test.py b/tests/unit/cli/log_printer_test.py
index 575fcaf7b5..5b04226cf0 100644
--- a/tests/unit/cli/log_printer_test.py
+++ b/tests/unit/cli/log_printer_test.py
@@ -1,13 +1,13 @@
 from __future__ import absolute_import
 from __future__ import unicode_literals
 
-import mock
+import pytest
 import six
 
 from compose.cli.log_printer import LogPrinter
 from compose.cli.log_printer import wait_on_exit
 from compose.container import Container
-from tests import unittest
+from tests import mock
 
 
 def build_mock_container(reader):
@@ -22,40 +22,52 @@ def build_mock_container(reader):
     )
 
 
-class LogPrinterTest(unittest.TestCase):
-    def get_default_output(self, monochrome=False):
-        def reader(*args, **kwargs):
-            yield b"hello\nworld"
-        container = build_mock_container(reader)
-        output = run_log_printer([container], monochrome=monochrome)
-        return output
+@pytest.fixture
+def output_stream():
+    output = six.StringIO()
+    output.flush = mock.Mock()
+    return output
 
-    def test_single_container(self):
-        output = self.get_default_output()
 
-        self.assertIn('hello', output)
-        self.assertIn('world', output)
+@pytest.fixture
+def mock_container():
+    def reader(*args, **kwargs):
+        yield b"hello\nworld"
+    return build_mock_container(reader)
 
-    def test_monochrome(self):
-        output = self.get_default_output(monochrome=True)
-        self.assertNotIn('\033[', output)
 
-    def test_polychrome(self):
-        output = self.get_default_output()
-        self.assertIn('\033[', output)
+class TestLogPrinter(object):
 
-    def test_unicode(self):
+    def test_single_container(self, output_stream, mock_container):
+        LogPrinter([mock_container], output=output_stream).run()
+
+        output = output_stream.getvalue()
+        assert 'hello' in output
+        assert 'world' in output
+        # Call count is 2 lines + "container exited line"
+        assert output_stream.flush.call_count == 3
+
+    def test_monochrome(self, output_stream, mock_container):
+        LogPrinter([mock_container], output=output_stream, monochrome=True).run()
+        assert '\033[' not in output_stream.getvalue()
+
+    def test_polychrome(self, output_stream, mock_container):
+        LogPrinter([mock_container], output=output_stream).run()
+        assert '\033[' in output_stream.getvalue()
+
+    def test_unicode(self, output_stream):
         glyph = u'\u2022'
 
         def reader(*args, **kwargs):
             yield glyph.encode('utf-8') + b'\n'
 
         container = build_mock_container(reader)
-        output = run_log_printer([container])
+        LogPrinter([container], output=output_stream).run()
+        output = output_stream.getvalue()
         if six.PY2:
             output = output.decode('utf-8')
 
-        self.assertIn(glyph, output)
+        assert glyph in output
 
     def test_wait_on_exit(self):
         exit_status = 3
@@ -65,24 +77,12 @@ class LogPrinterTest(unittest.TestCase):
             wait=mock.Mock(return_value=exit_status))
 
         expected = '{} exited with code {}\n'.format(mock_container.name, exit_status)
-        self.assertEqual(expected, wait_on_exit(mock_container))
+        assert expected == wait_on_exit(mock_container)
 
-    def test_generator_with_no_logs(self):
-        mock_container = mock.Mock(
-            spec=Container,
-            has_api_logs=False,
-            log_driver='none',
-            name_without_project='web_1',
-            wait=mock.Mock(return_value=0))
+    def test_generator_with_no_logs(self, mock_container, output_stream):
+        mock_container.has_api_logs = False
+        mock_container.log_driver = 'none'
+        LogPrinter([mock_container], output=output_stream).run()
 
-        output = run_log_printer([mock_container])
-        self.assertIn(
-            "WARNING: no logs are available with the 'none' log driver\n",
-            output
-        )
-
-
-def run_log_printer(containers, monochrome=False):
-    output = six.StringIO()
-    LogPrinter(containers, output=output, monochrome=monochrome).run()
-    return output.getvalue()
+        output = output_stream.getvalue()
+        assert "WARNING: no logs are available with the 'none' log driver\n" in output
diff --git a/tests/unit/config/config_test.py b/tests/unit/config/config_test.py
index 2835e9c805..3038af80d0 100644
--- a/tests/unit/config/config_test.py
+++ b/tests/unit/config/config_test.py
@@ -18,13 +18,14 @@ from tests import unittest
 
 def make_service_dict(name, service_dict, working_dir, filename=None):
     """
-    Test helper function to construct a ServiceLoader
+    Test helper function to construct a ServiceExtendsResolver
     """
-    return config.ServiceLoader(
+    resolver = config.ServiceExtendsResolver(config.ServiceConfig(
         working_dir=working_dir,
         filename=filename,
-        service_name=name,
-        service_dict=service_dict).make_service_dict()
+        name=name,
+        config=service_dict))
+    return config.process_service(resolver.run())
 
 
 def service_sort(services):
@@ -76,18 +77,38 @@ class ConfigTest(unittest.TestCase):
             )
 
     def test_config_invalid_service_names(self):
-        with self.assertRaises(ConfigurationError):
-            for invalid_name in ['?not?allowed', ' ', '', '!', '/', '\xe2']:
-                config.load(
-                    build_config_details(
-                        {invalid_name: {'image': 'busybox'}},
-                        'working_dir',
-                        'filename.yml'
-                    )
-                )
+        for invalid_name in ['?not?allowed', ' ', '', '!', '/', '\xe2']:
+            with pytest.raises(ConfigurationError) as exc:
+                config.load(build_config_details(
+                    {invalid_name: {'image': 'busybox'}},
+                    'working_dir',
+                    'filename.yml'))
+            assert 'Invalid service name \'%s\'' % invalid_name in exc.exconly()
+
+    def test_load_with_invalid_field_name(self):
+        config_details = build_config_details(
+            {'web': {'image': 'busybox', 'name': 'bogus'}},
+            'working_dir',
+            'filename.yml')
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        error_msg = "Unsupported config option for 'web' service: 'name'"
+        assert error_msg in exc.exconly()
+        assert "Validation failed in file 'filename.yml'" in exc.exconly()
+
+    def test_load_invalid_service_definition(self):
+        config_details = build_config_details(
+            {'web': 'wrong'},
+            'working_dir',
+            'filename.yml')
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        error_msg = "service 'web' doesn't have any configuration options"
+        assert error_msg in exc.exconly()
 
     def test_config_integer_service_name_raise_validation_error(self):
-        expected_error_msg = "Service name: 1 needs to be a string, eg '1'"
+        expected_error_msg = ("In file 'filename.yml' service name: 1 needs to "
+                              "be a string, eg '1'")
         with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
             config.load(
                 build_config_details(
@@ -137,25 +158,26 @@ class ConfigTest(unittest.TestCase):
 
     def test_load_with_multiple_files_and_empty_override(self):
         base_file = config.ConfigFile(
-            'base.yaml',
+            'base.yml',
             {'web': {'image': 'example/web'}})
-        override_file = config.ConfigFile('override.yaml', None)
+        override_file = config.ConfigFile('override.yml', None)
         details = config.ConfigDetails('.', [base_file, override_file])
 
         with pytest.raises(ConfigurationError) as exc:
             config.load(details)
-        assert 'Top level object needs to be a dictionary' in exc.exconly()
+        error_msg = "Top level object in 'override.yml' needs to be an object"
+        assert error_msg in exc.exconly()
 
     def test_load_with_multiple_files_and_empty_base(self):
-        base_file = config.ConfigFile('base.yaml', None)
+        base_file = config.ConfigFile('base.yml', None)
         override_file = config.ConfigFile(
-            'override.yaml',
+            'override.yml',
             {'web': {'image': 'example/web'}})
         details = config.ConfigDetails('.', [base_file, override_file])
 
         with pytest.raises(ConfigurationError) as exc:
             config.load(details)
-        assert 'Top level object needs to be a dictionary' in exc.exconly()
+        assert "Top level object in 'base.yml' needs to be an object" in exc.exconly()
 
     def test_load_with_multiple_files_and_extends_in_override_file(self):
         base_file = config.ConfigFile(
@@ -177,6 +199,7 @@ class ConfigTest(unittest.TestCase):
         details = config.ConfigDetails('.', [base_file, override_file])
 
         tmpdir = py.test.ensuretemp('config_test')
+        self.addCleanup(tmpdir.remove)
         tmpdir.join('common.yml').write("""
             base:
               labels: ['label=one']
@@ -194,15 +217,28 @@ class ConfigTest(unittest.TestCase):
         ]
         self.assertEqual(service_sort(service_dicts), service_sort(expected))
 
+    def test_load_with_multiple_files_and_invalid_override(self):
+        base_file = config.ConfigFile(
+            'base.yaml',
+            {'web': {'image': 'example/web'}})
+        override_file = config.ConfigFile(
+            'override.yaml',
+            {'bogus': 'thing'})
+        details = config.ConfigDetails('.', [base_file, override_file])
+
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(details)
+        assert "service 'bogus' doesn't have any configuration" in exc.exconly()
+        assert "In file 'override.yaml'" in exc.exconly()
+
     def test_config_valid_service_names(self):
         for valid_name in ['_', '-', '.__.', '_what-up.', 'what_.up----', 'whatup']:
-            config.load(
+            services = config.load(
                 build_config_details(
                     {valid_name: {'image': 'busybox'}},
                     'tests/fixtures/extends',
-                    'common.yml'
-                )
-            )
+                    'common.yml'))
+            assert services[0]['name'] == valid_name
 
     def test_config_invalid_ports_format_validation(self):
         expected_error_msg = "Service 'web' configuration key 'ports' contains an invalid type"
@@ -267,7 +303,8 @@ class ConfigTest(unittest.TestCase):
             )
 
     def test_invalid_config_not_a_dictionary(self):
-        expected_error_msg = "Top level object needs to be a dictionary."
+        expected_error_msg = ("Top level object in 'filename.yml' needs to be "
+                              "an object.")
         with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
             config.load(
                 build_config_details(
@@ -348,6 +385,60 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+    def test_config_ulimits_invalid_keys_validation_error(self):
+        expected = ("Service 'web' configuration key 'ulimits' 'nofile' contains "
+                    "unsupported option: 'not_soft_or_hard'")
+
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(build_config_details(
+                {
+                    'web': {
+                        'image': 'busybox',
+                        'ulimits': {
+                            'nofile': {
+                                "not_soft_or_hard": 100,
+                                "soft": 10000,
+                                "hard": 20000,
+                            }
+                        }
+                    }
+                },
+                'working_dir',
+                'filename.yml'))
+        assert expected in exc.exconly()
+
+    def test_config_ulimits_required_keys_validation_error(self):
+
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(build_config_details(
+                {
+                    'web': {
+                        'image': 'busybox',
+                        'ulimits': {'nofile': {"soft": 10000}}
+                    }
+                },
+                'working_dir',
+                'filename.yml'))
+        assert "Service 'web' configuration key 'ulimits' 'nofile'" in exc.exconly()
+        assert "'hard' is a required property" in exc.exconly()
+
+    def test_config_ulimits_soft_greater_than_hard_error(self):
+        expected = "cannot contain a 'soft' value higher than 'hard' value"
+
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(build_config_details(
+                {
+                    'web': {
+                        'image': 'busybox',
+                        'ulimits': {
+                            'nofile': {"soft": 10000, "hard": 1000}
+                        }
+                    }
+                },
+                'working_dir',
+                'filename.yml'))
+        assert expected in exc.exconly()
+
     def test_valid_config_which_allows_two_type_definitions(self):
         expose_values = [["8000"], [8000]]
         for expose in expose_values:
@@ -395,23 +486,22 @@ class ConfigTest(unittest.TestCase):
         self.assertTrue(mock_logging.warn.called)
         self.assertTrue(expected_warning_msg in mock_logging.warn.call_args[0][0])
 
-    def test_config_invalid_environment_dict_key_raises_validation_error(self):
-        expected_error_msg = "Service 'web' configuration key 'environment' contains unsupported option: '---'"
-
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
-            config.load(
-                build_config_details(
-                    {'web': {
-                        'image': 'busybox',
-                        'environment': {'---': 'nope'}
-                    }},
-                    'working_dir',
-                    'filename.yml'
-                )
+    def test_config_valid_environment_dict_key_contains_dashes(self):
+        services = config.load(
+            build_config_details(
+                {'web': {
+                    'image': 'busybox',
+                    'environment': {'SPRING_JPA_HIBERNATE_DDL-AUTO': 'none'}
+                }},
+                'working_dir',
+                'filename.yml'
             )
+        )
+        self.assertEqual(services[0]['environment']['SPRING_JPA_HIBERNATE_DDL-AUTO'], 'none')
 
     def test_load_yaml_with_yaml_error(self):
         tmpdir = py.test.ensuretemp('invalid_yaml_test')
+        self.addCleanup(tmpdir.remove)
         invalid_yaml_file = tmpdir.join('docker-compose.yml')
         invalid_yaml_file.write("""
             web:
@@ -573,6 +663,11 @@ class VolumeConfigTest(unittest.TestCase):
         }, working_dir='.')
         self.assertEqual(d['volumes'], ['~:/data'])
 
+    def test_volume_path_with_non_ascii_directory(self):
+        volume = u'/Füü/data:/data'
+        container_path = config.resolve_volume_path(".", volume)
+        self.assertEqual(container_path, volume)
+
 
 class MergePathMappingTest(object):
     def config_name(self):
@@ -768,7 +863,7 @@ class MemoryOptionsTest(unittest.TestCase):
         a mem_limit
         """
         expected_error_msg = (
-            "Invalid 'memswap_limit' configuration for 'foo' service: when "
+            "Service 'foo' configuration key 'memswap_limit' is invalid: when "
             "defining 'memswap_limit' you must set 'mem_limit' as well"
         )
         with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
@@ -999,18 +1094,19 @@ class ExtendsTest(unittest.TestCase):
         ]))
 
     def test_circular(self):
-        try:
+        with pytest.raises(config.CircularReference) as exc:
             load_from_filename('tests/fixtures/extends/circle-1.yml')
-            raise Exception("Expected config.CircularReference to be raised")
-        except config.CircularReference as e:
-            self.assertEqual(
-                [(os.path.basename(filename), service_name) for (filename, service_name) in e.trail],
-                [
-                    ('circle-1.yml', 'web'),
-                    ('circle-2.yml', 'web'),
-                    ('circle-1.yml', 'web'),
-                ],
-            )
+
+        path = [
+            (os.path.basename(filename), service_name)
+            for (filename, service_name) in exc.value.trail
+        ]
+        expected = [
+            ('circle-1.yml', 'web'),
+            ('circle-2.yml', 'other'),
+            ('circle-1.yml', 'web'),
+        ]
+        self.assertEqual(path, expected)
 
     def test_extends_validation_empty_dictionary(self):
         with self.assertRaisesRegexp(ConfigurationError, 'service'):
diff --git a/tests/unit/progress_stream_test.py b/tests/unit/progress_stream_test.py
index d8f7ec8363..b01be11a86 100644
--- a/tests/unit/progress_stream_test.py
+++ b/tests/unit/progress_stream_test.py
@@ -34,3 +34,34 @@ class ProgressStreamTestCase(unittest.TestCase):
         ]
         events = progress_stream.stream_output(output, StringIO())
         self.assertEqual(len(events), 1)
+
+    def test_stream_output_progress_event_tty(self):
+        events = [
+            b'{"status": "Already exists", "progressDetail": {}, "id": "8d05e3af52b0"}'
+        ]
+
+        class TTYStringIO(StringIO):
+            def isatty(self):
+                return True
+
+        output = TTYStringIO()
+        events = progress_stream.stream_output(events, output)
+        self.assertTrue(len(output.getvalue()) > 0)
+
+    def test_stream_output_progress_event_no_tty(self):
+        events = [
+            b'{"status": "Already exists", "progressDetail": {}, "id": "8d05e3af52b0"}'
+        ]
+        output = StringIO()
+
+        events = progress_stream.stream_output(events, output)
+        self.assertEqual(len(output.getvalue()), 0)
+
+    def test_stream_output_no_progress_event_no_tty(self):
+        events = [
+            b'{"status": "Pulling from library/xy", "id": "latest"}'
+        ]
+        output = StringIO()
+
+        events = progress_stream.stream_output(events, output)
+        self.assertTrue(len(output.getvalue()) > 0)
diff --git a/tests/unit/project_test.py b/tests/unit/project_test.py
index fc189fbb15..b38f5c783c 100644
--- a/tests/unit/project_test.py
+++ b/tests/unit/project_test.py
@@ -7,6 +7,8 @@ from .. import unittest
 from compose.const import LABEL_SERVICE
 from compose.container import Container
 from compose.project import Project
+from compose.service import ContainerNet
+from compose.service import Net
 from compose.service import Service
 
 
@@ -263,6 +265,32 @@ class ProjectTest(unittest.TestCase):
         service = project.get_service('test')
         self.assertEqual(service.net.mode, 'container:' + container_name)
 
+    def test_uses_default_network_true(self):
+        web = Service('web', project='test', image="alpine", net=Net('test'))
+        db = Service('web', project='test', image="alpine", net=Net('other'))
+        project = Project('test', [web, db], None)
+        assert project.uses_default_network()
+
+    def test_uses_default_network_custom_name(self):
+        web = Service('web', project='test', image="alpine", net=Net('other'))
+        project = Project('test', [web], None)
+        assert not project.uses_default_network()
+
+    def test_uses_default_network_host(self):
+        web = Service('web', project='test', image="alpine", net=Net('host'))
+        project = Project('test', [web], None)
+        assert not project.uses_default_network()
+
+    def test_uses_default_network_container(self):
+        container = mock.Mock(id='test')
+        web = Service(
+            'web',
+            project='test',
+            image="alpine",
+            net=ContainerNet(container))
+        project = Project('test', [web], None)
+        assert not project.uses_default_network()
+
     def test_container_without_name(self):
         self.mock_client.containers.return_value = [
             {'Image': 'busybox:latest', 'Id': '1', 'Name': '1'},
diff --git a/tests/unit/service_test.py b/tests/unit/service_test.py
index d86f80f730..311d5c95e7 100644
--- a/tests/unit/service_test.py
+++ b/tests/unit/service_test.py
@@ -12,6 +12,7 @@ from compose.const import LABEL_ONE_OFF
 from compose.const import LABEL_PROJECT
 from compose.const import LABEL_SERVICE
 from compose.container import Container
+from compose.service import build_ulimits
 from compose.service import build_volume_binding
 from compose.service import ConfigError
 from compose.service import ContainerNet
@@ -213,16 +214,6 @@ class ServiceTest(unittest.TestCase):
         opts = service._get_container_create_options({'image': 'foo'}, 1)
         self.assertIsNone(opts.get('hostname'))
 
-    def test_hostname_defaults_to_service_name_when_using_networking(self):
-        service = Service(
-            'foo',
-            image='foo',
-            use_networking=True,
-            client=self.mock_client,
-        )
-        opts = service._get_container_create_options({'image': 'foo'}, 1)
-        self.assertEqual(opts['hostname'], 'foo')
-
     def test_get_container_create_options_with_name_option(self):
         service = Service(
             'foo',
@@ -349,44 +340,38 @@ class ServiceTest(unittest.TestCase):
         self.assertEqual(parse_repository_tag("user/repo@sha256:digest"), ("user/repo", "sha256:digest", "@"))
         self.assertEqual(parse_repository_tag("url:5000/repo@sha256:digest"), ("url:5000/repo", "sha256:digest", "@"))
 
-    @mock.patch('compose.service.Container', autospec=True)
-    def test_create_container_latest_is_used_when_no_tag_specified(self, mock_container):
-        service = Service('foo', client=self.mock_client, image='someimage')
-        images = []
-
-        def pull(repo, tag=None, **kwargs):
-            self.assertEqual('someimage', repo)
-            self.assertEqual('latest', tag)
-            images.append({'Id': 'abc123'})
-            return []
-
-        service.image = lambda *args, **kwargs: mock_get_image(images)
-        self.mock_client.pull = pull
-
-        service.create_container()
-        self.assertEqual(1, len(images))
-
     def test_create_container_with_build(self):
         service = Service('foo', client=self.mock_client, build='.')
-
-        images = []
-        service.image = lambda *args, **kwargs: mock_get_image(images)
-        service.build = lambda: images.append({'Id': 'abc123'})
+        self.mock_client.inspect_image.side_effect = [
+            NoSuchImageError,
+            {'Id': 'abc123'},
+        ]
+        self.mock_client.build.return_value = [
+            '{"stream": "Successfully built abcd"}',
+        ]
 
         service.create_container(do_build=True)
-        self.assertEqual(1, len(images))
+        self.mock_client.build.assert_called_once_with(
+            tag='default_foo',
+            dockerfile=None,
+            stream=True,
+            path='.',
+            pull=False,
+            forcerm=False,
+            nocache=False,
+            rm=True,
+        )
 
     def test_create_container_no_build(self):
         service = Service('foo', client=self.mock_client, build='.')
-        service.image = lambda: {'Id': 'abc123'}
+        self.mock_client.inspect_image.return_value = {'Id': 'abc123'}
 
         service.create_container(do_build=False)
         self.assertFalse(self.mock_client.build.called)
 
     def test_create_container_no_build_but_needs_build(self):
         service = Service('foo', client=self.mock_client, build='.')
-        service.image = lambda *args, **kwargs: mock_get_image([])
-
+        self.mock_client.inspect_image.side_effect = NoSuchImageError
         with self.assertRaises(NeedsBuildError):
             service.create_container(do_build=False)
 
@@ -417,7 +402,7 @@ class ServiceTest(unittest.TestCase):
             'options': {'image': 'example.com/foo'},
             'links': [('one', 'one')],
             'net': 'other',
-            'volumes_from': ['two'],
+            'volumes_from': [('two', 'rw')],
         }
         self.assertEqual(config_dict, expected)
 
@@ -451,6 +436,47 @@ class ServiceTest(unittest.TestCase):
         self.assertEqual(service._get_links(link_to_self=True), [])
 
 
+def sort_by_name(dictionary_list):
+    return sorted(dictionary_list, key=lambda k: k['name'])
+
+
+class BuildUlimitsTestCase(unittest.TestCase):
+
+    def test_build_ulimits_with_dict(self):
+        ulimits = build_ulimits(
+            {
+                'nofile': {'soft': 10000, 'hard': 20000},
+                'nproc': {'soft': 65535, 'hard': 65535}
+            }
+        )
+        expected = [
+            {'name': 'nofile', 'soft': 10000, 'hard': 20000},
+            {'name': 'nproc', 'soft': 65535, 'hard': 65535}
+        ]
+        assert sort_by_name(ulimits) == sort_by_name(expected)
+
+    def test_build_ulimits_with_ints(self):
+        ulimits = build_ulimits({'nofile': 20000, 'nproc': 65535})
+        expected = [
+            {'name': 'nofile', 'soft': 20000, 'hard': 20000},
+            {'name': 'nproc', 'soft': 65535, 'hard': 65535}
+        ]
+        assert sort_by_name(ulimits) == sort_by_name(expected)
+
+    def test_build_ulimits_with_integers_and_dicts(self):
+        ulimits = build_ulimits(
+            {
+                'nproc': 65535,
+                'nofile': {'soft': 10000, 'hard': 20000}
+            }
+        )
+        expected = [
+            {'name': 'nofile', 'soft': 10000, 'hard': 20000},
+            {'name': 'nproc', 'soft': 65535, 'hard': 65535}
+        ]
+        assert sort_by_name(ulimits) == sort_by_name(expected)
+
+
 class NetTestCase(unittest.TestCase):
 
     def test_net(self):
@@ -494,13 +520,6 @@ class NetTestCase(unittest.TestCase):
         self.assertEqual(net.service_name, service_name)
 
 
-def mock_get_image(images):
-    if images:
-        return images[0]
-    else:
-        raise NoSuchImageError()
-
-
 class ServiceVolumesTest(unittest.TestCase):
 
     def setUp(self):
@@ -545,11 +564,11 @@ class ServiceVolumesTest(unittest.TestCase):
         self.assertEqual(binding, ('/inside', '/outside:/inside:rw'))
 
     def test_get_container_data_volumes(self):
-        options = [
+        options = [parse_volume_spec(v) for v in [
             '/host/volume:/host/volume:ro',
             '/new/volume',
             '/existing/volume',
-        ]
+        ]]
 
         self.mock_client.inspect_image.return_value = {
             'ContainerConfig': {
@@ -568,13 +587,13 @@ class ServiceVolumesTest(unittest.TestCase):
             },
         }, has_been_inspected=True)
 
-        expected = {
-            '/existing/volume': '/var/lib/docker/aaaaaaaa:/existing/volume:rw',
-            '/mnt/image/data': '/var/lib/docker/cccccccc:/mnt/image/data:rw',
-        }
+        expected = [
+            parse_volume_spec('/var/lib/docker/aaaaaaaa:/existing/volume:rw'),
+            parse_volume_spec('/var/lib/docker/cccccccc:/mnt/image/data:rw'),
+        ]
 
-        binds = get_container_data_volumes(container, options)
-        self.assertEqual(binds, expected)
+        volumes = get_container_data_volumes(container, options)
+        self.assertEqual(sorted(volumes), sorted(expected))
 
     def test_merge_volume_bindings(self):
         options = [
diff --git a/tests/unit/utils_test.py b/tests/unit/utils_test.py
index b272c7349a..e3d0bc00b5 100644
--- a/tests/unit/utils_test.py
+++ b/tests/unit/utils_test.py
@@ -1,3 +1,6 @@
+# encoding: utf-8
+from __future__ import unicode_literals
+
 from .. import unittest
 from compose import utils
 
@@ -14,3 +17,16 @@ class JsonSplitterTestCase(unittest.TestCase):
             utils.json_splitter(data),
             ({'foo': 'bar'}, '{"next": "obj"}')
         )
+
+
+class StreamAsTextTestCase(unittest.TestCase):
+
+    def test_stream_with_non_utf_unicode_character(self):
+        stream = [b'\xed\xf3\xf3']
+        output, = utils.stream_as_text(stream)
+        assert output == '���'
+
+    def test_stream_with_utf_character(self):
+        stream = ['ěĝ'.encode('utf-8')]
+        output, = utils.stream_as_text(stream)
+        assert output == 'ěĝ'
diff --git a/tox.ini b/tox.ini
index f05c5ed260..d1098a55a3 100644
--- a/tox.ini
+++ b/tox.ini
@@ -43,4 +43,6 @@ directory = coverage-html
 [flake8]
 # Allow really long lines for now
 max-line-length = 140
+# Set this high for now
+max-complexity = 20
 exclude = compose/packages