diff --git a/app/api.py b/app/api.py
index f86c60e..c8fd9bd 100644
--- a/app/api.py
+++ b/app/api.py
@@ -1,13 +1,15 @@
-from typing import Optional
+import os
+import sqlite3
+from typing import Annotated, Optional
 
-from fastapi import FastAPI
+from fastapi import Depends, FastAPI
+from fastapi.responses import JSONResponse
 from pydantic import BaseModel, Field, condecimal, conint, constr, root_validator
 
+import app.database as database
+from app.order_processor import FailedToProcessOrderError, process_order
 from app.types import Order, OrderSide, OrderType
 
-from datetime import datetime
-from app.stock_exchange import place_order
-
 app = FastAPI()
 
 
@@ -35,21 +37,33 @@ class CreateOrderResponseModel(Order):
     pass
 
 
-@app.post(
-    "/orders",
-    status_code=201,
-    response_model=CreateOrderResponseModel,
-    response_model_by_alias=True,
-)
-async def create_order(model: CreateOrderModel):
-    place_order(model)
-    return CreateOrderResponseModel(
-        id=1,
-        created_at=datetime.now(),
-        type=model.type_,
-        side=model.side,
-        instrument=model.instrument,
-        limit_price=model.limit_price,
-        quantity=model.quantity
+async def get_db():
+    # Replace with proper db connection pooling implementation
+    db = database.connect(os.getenv("DB_CONNECTION"))
+    database.apply_database_schema(db)
+    try:
+        yield db
+    finally:
+        db.close()
 
-    )
+
+@app.post("/orders", status_code=201)
+async def create_order(
+    model: CreateOrderModel, db: Annotated[sqlite3.Connection, Depends(get_db)]
+):
+    try:
+        order = process_order(db, model)
+        return CreateOrderResponseModel(
+            id=order.id_,
+            created_at=order.created_at,
+            type=order.type_,
+            side=order.side,
+            instrument=order.instrument,
+            limit_price=order.limit_price,
+            quantity=order.quantity,
+        )
+    except FailedToProcessOrderError:
+        return JSONResponse(
+            content={"message": "Internal server error while placing the order"},
+            status_code=500,
+        )
diff --git a/tests/api_test.py b/tests/api_test.py
index 5f73189..84be98a 100644
--- a/tests/api_test.py
+++ b/tests/api_test.py
@@ -1,11 +1,27 @@
-import pytest
+def test_placing_an_order(client):
+    response = client.post(
+        "/orders",
+        json={
+            "type": "limit",
+            "instrument": "US0378331005",
+            "limit_price": 100.00,
+            "quantity": 10,
+            "side": "buy",
+        },
+    )
 
-def test_rudimentary_request(client):
-    response = client.post("/orders", json={
-        "type": "limit",
-        "instrument": "US0378331005",
-        "limit_price": 100.00,
-        "quantity": 10,
-        "side": "buy"
-    })
-    assert response.status_code == 201
+    assert response.status_code == 201 or response.status_code == 500
+
+
+def test_create_order_with_invalid_request(client):
+    response = client.post(
+        "/orders",
+        json={
+            "type": "unknown_type",
+            "instrument": "US0378331005",
+            "limit_price": 100.00,
+            "quantity": 10,
+            "side": "buy",
+        },
+    )
+    assert response.status_code == 422
diff --git a/tests/conftest.py b/tests/conftest.py
index b625ad0..b7bb0ea 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -18,6 +18,7 @@ from app.api import app
 
 @pytest.fixture
 def client() -> TestClient:
+    os.environ["DB_CONNECTION"] = ":memory:"
     return TestClient(app)