diff --git a/libs/template/resolver.go b/libs/template/resolver.go
index 16b2e692b..5afc6a237 100644
--- a/libs/template/resolver.go
+++ b/libs/template/resolver.go
@@ -3,6 +3,7 @@ package template
 import (
 	"context"
 	"errors"
+	"fmt"
 
 	"github.com/databricks/cli/libs/git"
 )
@@ -37,7 +38,7 @@ var ErrCustomSelected = errors.New("custom template selected")
 // Prompts the user if needed.
 func (r Resolver) Resolve(ctx context.Context) (*Template, error) {
 	if r.Tag != "" && r.Branch != "" {
-		return nil, errors.New("only one of --tag or --branch can be specified")
+		return nil, fmt.Errorf("only one of --tag or --branch can be specified")
 	}
 
 	// Git ref to use for template initialization
diff --git a/libs/template/resolver_test.go b/libs/template/resolver_test.go
index c94548d59..d057e7880 100644
--- a/libs/template/resolver_test.go
+++ b/libs/template/resolver_test.go
@@ -66,7 +66,7 @@ func TestTemplateResolverForDefaultTemplates(t *testing.T) {
 	assert.Equal(t, "/config/file", tmpl.Writer.(*writerWithTelemetry).configPath)
 }
 
-func TestTemplateResolverForCustomTemplate(t *testing.T) {
+func TestTemplateResolverForCustomUrl(t *testing.T) {
 	r := Resolver{
 		TemplatePathOrUrl: "https://www.example.com/abc",
 		Tag:               "tag",
@@ -77,6 +77,8 @@ func TestTemplateResolverForCustomTemplate(t *testing.T) {
 	tmpl, err := r.Resolve(context.Background())
 	require.NoError(t, err)
 
+	assert.Equal(t, Custom, tmpl.name)
+
 	// Assert reader configuration
 	assert.Equal(t, "https://www.example.com/abc", tmpl.Reader.(*gitReader).gitUrl)
 	assert.Equal(t, "tag", tmpl.Reader.(*gitReader).ref)
@@ -85,3 +87,21 @@ func TestTemplateResolverForCustomTemplate(t *testing.T) {
 	// Assert writer configuration
 	assert.Equal(t, "/config/file", tmpl.Writer.(*defaultWriter).configPath)
 }
+
+func TestTemplateResolverForCustomPath(t *testing.T) {
+	r := Resolver{
+		TemplatePathOrUrl: "/custom/path",
+		ConfigFile:        "/config/file",
+	}
+
+	tmpl, err := r.Resolve(context.Background())
+	require.NoError(t, err)
+
+	assert.Equal(t, Custom, tmpl.name,)
+
+	// Assert reader configuration
+	assert.Equal(t, "/custom/path", tmpl.Reader.(*localReader).path)
+
+	// Assert writer configuration
+	assert.Equal(t, "/config/file", tmpl.Writer.(*defaultWriter).configPath)
+}