diff --git a/mercurial/dispatch.py b/mercurial/dispatch.py
--- a/mercurial/dispatch.py
+++ b/mercurial/dispatch.py
@@ -24,6 +24,9 @@ def dispatch(args):
     except util.Abort, inst:
         sys.stderr.write(_("abort: %s\n") % inst)
         return -1
+    except error.ConfigError, inst:
+        sys.stderr.write(_("hg: %s\n") % inst)
+        return -1
     return _runcatch(u, args)
 
 def _runcatch(ui, args):
diff --git a/tests/test-hgrc b/tests/test-hgrc
--- a/tests/test-hgrc
+++ b/tests/test-hgrc
@@ -16,3 +16,9 @@ cd foobar
 cat .hg/hgrc |sed -e "s:$p:...:"
 hg paths |sed -e "s:$p:...:"
 hg showconfig |sed -e "s:$p:...:"
+
+# issue1829: wrong indentation
+cd ..
+echo '[foo]' >> $HGRCPATH
+echo '  x = y' >> $HGRCPATH
+hg version 2>&1 | sed -e "s|$HGRCPATH|\$HGRCPATH|"
diff --git a/tests/test-hgrc.out b/tests/test-hgrc.out
--- a/tests/test-hgrc.out
+++ b/tests/test-hgrc.out
@@ -10,3 +10,4 @@ defaults.commit=-d "0 0"
 defaults.tag=-d "0 0"
 paths.default=.../foo%bar
 ui.slash=True
+hg: config error at $HGRCPATH:8: '  x = y'