diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7559200..dce2bac 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,6 +7,9 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+### Fixed
+- Fixed interactive prompt during `gum` package installation (added `--yes` to gpg command) to support re-running setup in non-interactive environments.
+
 ## [1.1.0] - 2025-12-07
 
 ### Added
diff --git a/setup.sh b/setup.sh
index b911b59..2715c91 100755
--- a/setup.sh
+++ b/setup.sh
@@ -185,18 +185,47 @@ fi
 
 log_step_start "Cloning repository"
 if [ -d "$INSTALL_DIR" ]; then
+    echo "⚠️  WARNING: specific directory already exists at $INSTALL_DIR"
+    echo "    This script is designed to run on a FRESH Kaggle instance."
+    echo "    Re-running on a used instance may cause issues."
+    echo "    Continuing with cleanup..."
     log_info "Repository directory already exists. Removing it..."
     rm -rf "$INSTALL_DIR"
 fi
 
-if ! git clone -b "$KAGGLELINK_BRANCH" "$REPO_URL" "$INSTALL_DIR"; then
-    categorize_error "network" "Failed to clone branch '$KAGGLELINK_BRANCH'" "Check branch exists and network connectivity"
+# Capture clone output for better error categorization
+if clone_output=$(git clone --depth 1 -b "$KAGGLELINK_BRANCH" "$REPO_URL" "$INSTALL_DIR" 2>&1); then
+    clone_status=0
+else
+    clone_status=$?
+fi
+
+if [ $clone_status -ne 0 ]; then
+    # Check if branch doesn't exist
+    if [[ "$clone_output" == *"Remote branch"*"not found"* ]] || [[ "$clone_output" == *"couldn't find remote ref"* ]]; then
+        categorize_error "prerequisite" \
+            "Branch '$KAGGLELINK_BRANCH' does not exist in repository" \
+            "Use BRANCH=main or check available branches at https://github.com/bhdai/kagglelink"
+    # Check for network issues
+    elif [[ "$clone_output" == *"Could not resolve host"* ]] || \
+         [[ "$clone_output" == *"Connection refused"* ]] || \
+         [[ "$clone_output" == *"Failed to connect"* ]]; then
+        categorize_error "network" \
+            "Network connectivity issue during clone" \
+            "Check internet connection and try again"
+    else
+        categorize_error "upstream" \
+            "Failed to clone repository" \
+            "GitHub may be temporarily unavailable or repository access restricted"
+    fi
     exit 1
 fi
-log_step_complete "Cloning repository"
 
-log_info "Changing to repository directory..."
+# Log commit hash for debugging purposes
 cd "$INSTALL_DIR"
+COMMIT_HASH=$(git rev-parse --short HEAD 2>/dev/null || echo "unknown")
+log_success "Cloned repository (branch: ${KAGGLELINK_BRANCH}, commit: ${COMMIT_HASH})"
+log_step_complete "Cloning repository"
 
 log_info "Making scripts executable..."
 chmod +x setup_kaggle_zrok.sh start_zrok.sh
diff --git a/setup_kaggle_zrok.sh b/setup_kaggle_zrok.sh
index 7da9144..9f61331 100644
--- a/setup_kaggle_zrok.sh
+++ b/setup_kaggle_zrok.sh
@@ -152,7 +152,7 @@ install_packages() {
     # Install gum
     log_info "Installing gum..."
     sudo mkdir -p /etc/apt/keyrings
-    curl -fsSL https://repo.charm.sh/apt/gpg.key | sudo gpg --dearmor -o /etc/apt/keyrings/charm.gpg
+    curl -fsSL https://repo.charm.sh/apt/gpg.key | sudo gpg --dearmor --yes -o /etc/apt/keyrings/charm.gpg
     echo "deb [signed-by=/etc/apt/keyrings/charm.gpg] https://repo.charm.sh/apt/ * *" | sudo tee /etc/apt/sources.list.d/charm.list
     
     sudo apt-get update
diff --git a/tests/unit/test_clone_recovery.bats b/tests/unit/test_clone_recovery.bats
new file mode 100644
index 0000000..a5c9f48
--- /dev/null
+++ b/tests/unit/test_clone_recovery.bats
@@ -0,0 +1,277 @@
+#!/usr/bin/env bats
+# Test suite for repository clone with graceful recovery (Story 1.4)
+#
+# Tests:
+# - Existing directory removal before clone
+# - Git prerequisite check
+# - Commit hash logging
+# - Network error categorization
+# - Branch not found error handling
+
+load '../test_helper/common'
+
+setup() {
+    # Store original directory
+    export ORIGINAL_DIR="$PWD"
+    
+    # Create isolated test environment
+    export TEST_TEMP_DIR="$(mktemp -d)"
+    export HOME="$TEST_TEMP_DIR/home"
+    mkdir -p "$HOME"
+    
+    # Store original PATH
+    export ORIGINAL_PATH="$PATH"
+    
+    # Export PROJECT_ROOT for tests
+    export PROJECT_ROOT="${BATS_TEST_DIRNAME}/../.."
+}
+
+teardown() {
+    # Restore PATH
+    export PATH="$ORIGINAL_PATH"
+    
+    # Clean up test environment
+    if [ -n "$TEST_TEMP_DIR" ] && [ -d "$TEST_TEMP_DIR" ]; then
+        rm -rf "$TEST_TEMP_DIR"
+    fi
+    
+    # Return to original directory
+    cd "$ORIGINAL_DIR"
+}
+
+# ============================================================================
+# AC3: Git Prerequisite Check
+# ============================================================================
+
+@test "P0: should detect missing git command" {
+    # Verify git check exists in source code (functional verification)
+    run grep -A 2 'if ! command -v git' "$PROJECT_ROOT/setup.sh"
+    
+    [ "$status" -eq 0 ]
+    [[ "$output" == *"git is not installed"* ]]
+    
+    # Verify error categorization is used
+    run grep 'categorize_error "prerequisite".*git' "$PROJECT_ROOT/setup.sh"
+    [ "$status" -eq 0 ]
+}
+
+# ============================================================================
+# AC1: Handle Existing Directory
+# ============================================================================
+
+@test "P0: should remove existing /tmp/kagglelink before clone" {
+    # Create mock git that simulates clone behavior
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    
+    # Mock git clone that creates the directory
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+if [ "$1" = "clone" ]; then
+    # Extract target directory (last argument)
+    for last; do true; done
+    mkdir -p "$last/.git"
+    printf '#!/bin/sh\necho "abc123"' > "$last/.git/rev-parse"
+    chmod +x "$last/.git/rev-parse"
+    exit 0
+elif [ "$1" = "rev-parse" ]; then
+    echo "abc123"
+    exit 0
+fi
+exit 1
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    # Pre-create directory with marker file
+    mkdir -p /tmp/kagglelink
+    touch /tmp/kagglelink/pre_existing_marker
+    
+    # Run with mocked git
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    # Verify marker file is gone (directory was recreated)
+    [ ! -f /tmp/kagglelink/pre_existing_marker ]
+}
+
+# ============================================================================
+# AC4: Clone Success Verification - Commit Hash Logging
+# ============================================================================
+
+@test "P1: should log commit hash after successful clone" {
+    # Create mock git that returns commit hash
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+if [ "$1" = "clone" ]; then
+    for last; do true; done
+    mkdir -p "$last"
+    exit 0
+elif [ "$1" = "rev-parse" ]; then
+    echo "abc1234"
+    exit 0
+fi
+exit 1
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    # Verify commit hash appears in output
+    [[ "$output" =~ commit:\ abc1234 ]]
+}
+
+@test "P1: should handle git rev-parse failure gracefully" {
+    # Create mock git where rev-parse fails
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+if [ "$1" = "clone" ]; then
+    for last; do true; done
+    mkdir -p "$last"
+    exit 0
+elif [ "$1" = "rev-parse" ]; then
+    exit 1
+fi
+exit 1
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    # Should fallback to "unknown"
+    [[ "$output" =~ commit:\ unknown ]]
+}
+
+# ============================================================================
+# AC2: Network Failure Handling - Error Categorization
+# ============================================================================
+
+@test "P1: should categorize network connectivity errors" {
+    # Mock git to simulate network error
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+echo "fatal: Could not resolve host: github.com" >&2
+exit 128
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    [ "$status" -eq 1 ]
+    # Check that our categorize_error logic caught it
+    [[ "$output" =~ "Network connectivity issue" ]]
+    [[ "$output" =~ "Check connectivity" ]]
+}
+
+@test "P1: should categorize branch not found errors" {
+    # Mock git to simulate branch error
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+echo "fatal: Remote branch feature/missing not found in upstream origin" >&2
+exit 128
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    [ "$status" -eq 1 ]
+    [[ "$output" =~ "does not exist" ]]
+    [[ "$output" =~ "Use BRANCH=main" ]]
+}
+
+@test "P1: should categorize upstream errors for other failures" {
+    # Mock git to simulate generic failure
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+echo "fatal: something went wrong on github side" >&2
+exit 128
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    [ "$status" -eq 1 ]
+    [[ "$output" =~ "Failed to clone repository" ]]
+    [[ "$output" =~ "GitHub may be temporarily unavailable" ]]
+}
+
+# ============================================================================
+# AC5: Shallow Clone Optimization
+# ============================================================================
+
+@test "P1: should use shallow clone with --depth 1" {
+    # Create mock git that captures and validates arguments
+    mkdir -p "$TEST_TEMP_DIR/bin"
+    
+    cat > "$TEST_TEMP_DIR/bin/git" <<'MOCKGIT'
+#!/bin/sh
+# Log all git commands to a file
+echo "$*" >> /tmp/git_commands.log
+
+if [ "$1" = "clone" ]; then
+    # Check if --depth 1 is present
+    if ! echo "$*" | grep -q "\-\-depth 1"; then
+        echo "ERROR: --depth 1 not found in git clone command" >&2
+        exit 99
+    fi
+    for last; do true; done
+    mkdir -p "$last"
+    exit 0
+elif [ "$1" = "rev-parse" ]; then
+    echo "abc1234"
+    exit 0
+fi
+exit 1
+MOCKGIT
+    chmod +x "$TEST_TEMP_DIR/bin/git"
+    
+    # Clear log file
+    rm -f /tmp/git_commands.log
+    
+    export PATH="$TEST_TEMP_DIR/bin:$ORIGINAL_PATH"
+    run bash "$PROJECT_ROOT/setup.sh" -k "https://example.com/keys" -t "test-token"
+    
+    # Should succeed (exit 99 would indicate --depth 1 was missing)
+    [ "$status" -ne 99 ]
+    
+    # Verify git clone was called with --depth 1
+    [ -f /tmp/git_commands.log ]
+    run cat /tmp/git_commands.log
+    [[ "$output" == *"--depth 1"* ]]
+    
+    # Cleanup
+    rm -f /tmp/git_commands.log
+}
+
+# ============================================================================
+# Edge Cases and Regression Prevention
+# ============================================================================
+
+@test "P2: setup.sh should still have inline logging functions" {
+    # Verify logging functions are still embedded (bootstrap requirement)
+    run grep -n "^log_info()" "$PROJECT_ROOT/setup.sh"
+    [ "$status" -eq 0 ]
+    
+    run grep -n "^log_success()" "$PROJECT_ROOT/setup.sh"
+    [ "$status" -eq 0 ]
+    
+    run grep -n "^categorize_error()" "$PROJECT_ROOT/setup.sh"
+    [ "$status" -eq 0 ]
+}
+
+@test "P2: should handle empty INSTALL_DIR variable gracefully" {
+    # Test that script validates INSTALL_DIR exists
+    run grep -n 'if \[ -d "\$INSTALL_DIR" \]' "$PROJECT_ROOT/setup.sh"
+    [ "$status" -eq 0 ]
+}
+