diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -65,8 +65,8 @@ def checkunknown(wctx, mctx):
     for f in wctx.unknown():
         if f in man:
             if mctx.filectx(f).cmp(wctx.filectx(f).data()):
-                raise util.Abort(_("'%s' already exists in the working"
-                                   " dir and differs from remote") % f)
+                raise util.Abort(_("untracked local file '%s' differs"\
+                                   " from remote version") % f)
 
 def forgetremoved(wctx, mctx):
     """