diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -384,9 +384,13 @@ def update(repo, node, branchmerge, forc
         if branchmerge:
             raise util.Abort(_("there is nothing to merge, just use "
                                "'hg update' or look at 'hg heads'"))
-    elif not (overwrite or branchmerge):
-        raise util.Abort(_("update spans branches, use 'hg merge' "
-                           "or 'hg update -C' to lose changes"))
+    elif not branchmerge:
+        if not overwrite:
+            if wc.files():
+                raise util.Abort(_("outstanding uncommited changes, use "
+                                   "'hg update -C' to lose changes"))
+            else:
+                overwrite = True
     if branchmerge and not forcemerge:
         if wc.modified() or wc.added() or wc.removed():
             raise util.Abort(_("outstanding uncommitted changes"))
diff --git a/tests/test-merge5 b/tests/test-merge5
--- a/tests/test-merge5
+++ b/tests/test-merge5
@@ -12,9 +12,13 @@ hg commit -m"comment #1" -d "1000000 0"
 hg update 0
 rm b
 hg commit -A -m"comment #2" -d "1000000 0"
+
+echo This is file a > a
 # in theory, we shouldn't need the "-y" below, but it prevents
 # this test from hanging when "hg update" erroneously prompts the
 # user for "keep or delete"
+hg update -y 1 # should fail (unclean repo)
+hg revert a
 hg update -y 1
 
 exit 0
diff --git a/tests/test-merge5.out b/tests/test-merge5.out
--- a/tests/test-merge5.out
+++ b/tests/test-merge5.out
@@ -1,3 +1,4 @@
 1 files updated, 0 files merged, 0 files removed, 0 files unresolved
 removing b
-abort: update spans branches, use 'hg merge' or 'hg update -C' to lose changes
+abort: outstanding uncommited changes, use 'hg update -C' to lose changes
+1 files updated, 0 files merged, 0 files removed, 0 files unresolved
diff --git a/tests/test-up-local-change.out b/tests/test-up-local-change.out
--- a/tests/test-up-local-change.out
+++ b/tests/test-up-local-change.out
@@ -93,7 +93,7 @@ user:        test
 date:        Mon Jan 12 13:46:40 1970 +0000
 summary:     2
 
-abort: update spans branches, use 'hg merge' or 'hg update -C' to lose changes
+abort: outstanding uncommited changes, use 'hg update -C' to lose changes
 failed
 abort: outstanding uncommitted changes
 failed