diff --git a/spec/enterprise/services/captain/llm/contact_notes_service_spec.rb b/spec/enterprise/services/captain/llm/contact_notes_service_spec.rb
new file mode 100644
index 000000000..3af246c9f
--- /dev/null
+++ b/spec/enterprise/services/captain/llm/contact_notes_service_spec.rb
@@ -0,0 +1,148 @@
+require 'rails_helper'
+
+RSpec.describe Captain::Llm::ContactNotesService do
+  let(:captain_assistant) { create(:captain_assistant) }
+  let(:account) { create(:account, locale: 'en') }
+  let(:conversation) { create(:conversation, account: account) }
+  let(:contact) { conversation.contact }
+  let(:service) { described_class.new(captain_assistant, conversation) }
+  let(:client) { instance_double(OpenAI::Client) }
+  let(:system_prompt) { 'Test system prompt' }
+
+  before do
+    create(:installation_config, name: 'CAPTAIN_OPEN_AI_API_KEY', value: 'test-key')
+    allow(OpenAI::Client).to receive(:new).and_return(client)
+    allow(Captain::Llm::SystemPromptsService).to receive(:notes_generator)
+      .with(account.locale_english_name).and_return(system_prompt)
+  end
+
+  describe '#generate_and_update_notes' do
+    let(:openai_response) do
+      {
+        'choices' => [
+          {
+            'message' => {
+              'content' => {
+                notes: [
+                  'Customer reported an issue with login',
+                  'Follow up needed on billing concerns'
+                ]
+              }.to_json
+            }
+          }
+        ]
+      }
+    end
+
+    context 'when successful' do
+      before do
+        allow(client).to receive(:chat).and_return(openai_response)
+      end
+
+      it 'creates notes for the contact' do
+        expect { service.generate_and_update_notes }.to change(contact.notes, :count).by(2)
+      end
+
+      it 'creates notes with correct content' do
+        service.generate_and_update_notes
+        expect(contact.notes.pluck(:content)).to contain_exactly('Customer reported an issue with login', 'Follow up needed on billing concerns')
+      end
+
+      it 'includes conversation and contact context in chat parameters' do
+        service.generate_and_update_notes
+        expect(client).to have_received(:chat) do |params|
+          messages = params[:parameters][:messages]
+          content = messages.find { |m| m[:role] == 'user' }[:content]
+          expect(content).to include('#Contact')
+          expect(content).to include('#Conversation')
+        end
+      end
+
+      it 'includes system message in chat parameters' do
+        service.generate_and_update_notes
+        expect(client).to have_received(:chat) do |params|
+          messages = params[:parameters][:messages]
+          system_message = messages.find { |m| m[:role] == 'system' }
+          expect(system_message[:content]).to eq(system_prompt)
+        end
+      end
+    end
+
+    context 'when OpenAI API fails' do
+      before do
+        allow(client).to receive(:chat).and_raise(OpenAI::Error.new('API Error'))
+      end
+
+      it 'logs error and returns empty array' do
+        expect(Rails.logger).to receive(:error).with('OpenAI API Error: API Error')
+        expect { service.generate_and_update_notes }.not_to change(contact.notes, :count)
+      end
+    end
+
+    context 'when response parsing fails' do
+      let(:invalid_response) do
+        {
+          'choices' => [
+            {
+              'message' => {
+                'content' => 'Invalid JSON'
+              }
+            }
+          ]
+        }
+      end
+
+      before do
+        allow(client).to receive(:chat).and_return(invalid_response)
+      end
+
+      it 'logs error and returns empty array' do
+        expect(Rails.logger).to receive(:error).with(/Error in parsing GPT processed response/)
+        expect { service.generate_and_update_notes }.not_to change(contact.notes, :count)
+      end
+    end
+
+    context 'when response is missing content' do
+      let(:empty_response) do
+        {
+          'choices' => [
+            {
+              'message' => {}
+            }
+          ]
+        }
+      end
+
+      before do
+        allow(client).to receive(:chat).and_return(empty_response)
+      end
+
+      it 'returns empty array' do
+        expect { service.generate_and_update_notes }.not_to change(contact.notes, :count)
+      end
+    end
+  end
+
+  describe '#chat_parameters' do
+    before do
+      allow(client).to receive(:chat).and_return({
+                                                   'choices' => [
+                                                     {
+                                                       'message' => {
+                                                         'content' => { notes: [] }.to_json
+                                                       }
+                                                     }
+                                                   ]
+                                                 })
+    end
+
+    it 'includes correct model and response format' do
+      service.generate_and_update_notes
+      expect(client).to have_received(:chat) do |params|
+        parameters = params[:parameters]
+        expect(parameters[:model]).to eq('gpt-4o-mini')
+        expect(parameters[:response_format]).to eq({ type: 'json_object' })
+      end
+    end
+  end
+end