diff --git a/app/models/account.rb b/app/models/account.rb
index db4092733f0..ea5bceda76f 100644
--- a/app/models/account.rb
+++ b/app/models/account.rb
@@ -72,6 +72,7 @@ class Account < ActiveRecord::Base
   before_save :ensure_defaults
   before_save :set_update_account_associations_if_changed
   after_save :update_account_associations_if_changed
+  after_create :default_enrollment_term
   
   serialize :settings, Hash
 
@@ -474,7 +475,9 @@ class Account < ActiveRecord::Base
   end
   
   def default_enrollment_term
-    self.enrollment_terms.active.find_or_create_by_name("Default Term")
+    unless self.root_account_id
+      self.enrollment_terms.active.find_or_create_by_name("Default Term")
+    end
   end
   
   def add_admin(args)
diff --git a/spec/models/account_spec.rb b/spec/models/account_spec.rb
index fcbc8d828e5..5a262a62f4d 100644
--- a/spec/models/account_spec.rb
+++ b/spec/models/account_spec.rb
@@ -109,5 +109,15 @@ describe Account do
       a.turnitin_shared_secret.should eql("2t87aot72gho8a37gh4g[awg'waegawe-,v-3o7fya23oya2o3")
     end
   end
-  
+
+  it "should make a default enrollment term if necessary" do
+    a = Account.create!(:name => "nada")
+    a.enrollment_terms.size.should == 1
+    a.enrollment_terms.first.name.should == "Default Term"
+
+    # don't create a new default term for sub-accounts
+    a2 = a.all_accounts.create!(:name => "sub")
+    a2.enrollment_terms.size.should == 0
+  end
+
 end