diff --git a/libsolidity/AST.cpp b/libsolidity/AST.cpp
index c0a120b82..26897ddae 100644
--- a/libsolidity/AST.cpp
+++ b/libsolidity/AST.cpp
@@ -493,19 +493,9 @@ void FunctionCall::checkTypeRequirements()
 		if (m_names.empty())
 		{
 			for (size_t i = 0; i < m_arguments.size(); ++i)
-			{
-				if (functionType->getLocation() == FunctionType::Location::SHA3)
-				{
-#if 0 // are we sure we want that? Literal constant nums can't live outside storage and so sha3(42) will fail
-					if (!m_arguments[i]->getType()->canLiveOutsideStorage())
-						BOOST_THROW_EXCEPTION(createTypeError("SHA3 called with argument that can't live outside storage"));
-#endif
-					if (!m_arguments[i]->getType()->isImplicitlyConvertibleTo(*parameterTypes[0]))
-						BOOST_THROW_EXCEPTION(m_arguments[i]->createTypeError("SHA3 argument can't be converted to hash"));
-
-				} else if (!m_arguments[i]->getType()->isImplicitlyConvertibleTo(*parameterTypes[i]))
+				if (functionType->getLocation() != FunctionType::Location::SHA3 &&
+					!m_arguments[i]->getType()->isImplicitlyConvertibleTo(*parameterTypes[i]))
 					BOOST_THROW_EXCEPTION(createTypeError("Invalid type for argument in function call."));
-			}
 		}
 		else if (functionType->getLocation() == FunctionType::Location::SHA3)
 			BOOST_THROW_EXCEPTION(createTypeError("Named arguments can't be used for SHA3."));
diff --git a/libsolidity/ExpressionCompiler.cpp b/libsolidity/ExpressionCompiler.cpp
index 39593a6ed..4f091db4c 100644
--- a/libsolidity/ExpressionCompiler.cpp
+++ b/libsolidity/ExpressionCompiler.cpp
@@ -851,22 +851,23 @@ unsigned ExpressionCompiler::appendArgumentsCopyToMemory(vector<ASTPointer<Expre
 	// without type conversion
 	for (unsigned i = 0; i < _arguments.size(); ++i)
 	{
+		bool wantPadding = (_arguments[i]->getType()->getCategory() == Type::Category::STRING) ? false : true;
 		_arguments[i]->accept(*this);
-		length += moveTypeToMemory(*_arguments[i]->getType()->getRealType(), _arguments[i]->getLocation(), _memoryOffset + length);
+		length += moveTypeToMemory(*_arguments[i]->getType()->getRealType(), _arguments[i]->getLocation(), _memoryOffset + length, wantPadding);
 	}
 	return length;
 }
 
-unsigned ExpressionCompiler::moveTypeToMemory(Type const& _type, Location const& _location, unsigned _memoryOffset)
+unsigned ExpressionCompiler::moveTypeToMemory(Type const& _type, Location const& _location, unsigned _memoryOffset, bool _padToWordBoundaries)
 {
-	unsigned const c_numBytes = CompilerUtils::getPaddedSize(_type.getCalldataEncodedSize());
+	unsigned const encodedSize = _type.getCalldataEncodedSize();
+	unsigned const c_numBytes = _padToWordBoundaries ? CompilerUtils::getPaddedSize(encodedSize) : encodedSize;
 	if (c_numBytes == 0 || c_numBytes > 32)
 		BOOST_THROW_EXCEPTION(CompilerError()
 							  << errinfo_sourceLocation(_location)
 							  << errinfo_comment("Type " + _type.toString() + " not yet supported."));
 	bool const c_leftAligned = _type.getCategory() == Type::Category::STRING;
-	bool const c_padToWords = true;
-	return CompilerUtils(m_context).storeInMemory(_memoryOffset, c_numBytes, c_leftAligned, c_padToWords);
+	return CompilerUtils(m_context).storeInMemory(_memoryOffset, c_numBytes, c_leftAligned, _padToWordBoundaries);
 }
 
 unsigned ExpressionCompiler::appendTypeConversionAndMoveToMemory(Type const& _expectedType, Type const& _type,
diff --git a/libsolidity/ExpressionCompiler.h b/libsolidity/ExpressionCompiler.h
index 70cc2426b..006858cb8 100644
--- a/libsolidity/ExpressionCompiler.h
+++ b/libsolidity/ExpressionCompiler.h
@@ -103,7 +103,7 @@ private:
 												 Location const& _location, unsigned _memoryOffset = 0);
 	/// Appends code that moves a type to memory
 	/// @returns the number of bytes copied to memory
-	unsigned moveTypeToMemory(Type const& _type, Location const& _location, unsigned _memoryOffset);
+	unsigned moveTypeToMemory(Type const& _type, Location const& _location, unsigned _memoryOffset, bool _padToWordBoundaries = true);
 	/// Appends code that evaluates a single expression and copies it to memory (with optional offset).
 	/// @returns the number of bytes copied to memory
 	unsigned appendExpressionCopyToMemory(Type const& _expectedType, Expression const& _expression,
diff --git a/libsolidity/Types.h b/libsolidity/Types.h
index 18a53f9a5..677e5e49e 100644
--- a/libsolidity/Types.h
+++ b/libsolidity/Types.h
@@ -249,6 +249,7 @@ public:
 
 	virtual std::string toString() const override { return "string" + dev::toString(m_bytes); }
 	virtual u256 literalValue(Literal const* _literal) const override;
+	virtual TypePointer getRealType() const override { return std::make_shared<StaticStringType>(m_bytes); }
 
 	int getNumBytes() const { return m_bytes; }
 
diff --git a/test/SolidityEndToEndTest.cpp b/test/SolidityEndToEndTest.cpp
index 083f55025..bd473af56 100644
--- a/test/SolidityEndToEndTest.cpp
+++ b/test/SolidityEndToEndTest.cpp
@@ -2099,7 +2099,6 @@ BOOST_AUTO_TEST_CASE(sha3_multiple_arguments)
 {
 	char const* sourceCode = R"(
 		contract c {
-			// function foo(uint a) returns (hash d)
 			function foo(uint a, uint b, uint c) returns (hash d)
 			{
 				d = sha3(a, b, c);
@@ -2114,6 +2113,50 @@ BOOST_AUTO_TEST_CASE(sha3_multiple_arguments)
 						toBigEndian(u256(13)))));
 }
 
+BOOST_AUTO_TEST_CASE(sha3_multiple_arguments_with_numeric_literals)
+{
+	char const* sourceCode = R"(
+		contract c {
+			function foo(uint a, uint16 b) returns (hash d)
+			{
+				d = sha3(a, b, 145);
+			}
+		})";
+	compileAndRun(sourceCode);
+
+	BOOST_CHECK(callContractFunction("foo(uint256,uint16)", 10, 12) == encodeArgs(
+					dev::sha3(
+						toBigEndian(u256(10)) +
+						toBigEndian(u256(12)) +
+						toBigEndian(u256(145)))));
+}
+
+BOOST_AUTO_TEST_CASE(sha3_multiple_arguments_with_string_literals)
+{
+	char const* sourceCode = R"(
+		contract c {
+			function foo() returns (hash d)
+			{
+				d = sha3("foo");
+			}
+			function bar(uint a, uint16 b) returns (hash d)
+			{
+				d = sha3(a, b, 145, "foo");
+			}
+		})";
+	compileAndRun(sourceCode);
+
+	BOOST_CHECK(callContractFunction("foo()") == encodeArgs(dev::sha3("foo")));
+#if 0 // work in progress
+	BOOST_CHECK(callContractFunction("bar(uint256,uint16)", 10, 12) == encodeArgs(
+					dev::sha3(
+						toBigEndian(u256(10)) +
+						toBigEndian(u256(12)) +
+						toBigEndian(u256(145)) +
+						asBytes("foo")))));
+#endif
+}
+
 BOOST_AUTO_TEST_SUITE_END()
 
 }