diff --git a/compiler/src/dotty/tools/dotc/core/Types.scala b/compiler/src/dotty/tools/dotc/core/Types.scala
index fefe1b5c1cd1..e51ad56e8a88 100644
--- a/compiler/src/dotty/tools/dotc/core/Types.scala
+++ b/compiler/src/dotty/tools/dotc/core/Types.scala
@@ -4518,7 +4518,9 @@ object Types {
           case et: ExprType => true
           case _ => false
         }
-        if (tp.cls.is(Trait) || zeroParams(tp.cls.primaryConstructor.info)) tp // !!! needs to be adapted once traits have parameters
+        // `ImplicitFunctionN` does not have constructors
+        val ctor = tp.cls.primaryConstructor
+        if (!ctor.exists || zeroParams(ctor.info)) tp
         else NoType
       case tp: AppliedType =>
         zeroParamClass(tp.superType)
diff --git a/tests/neg/i7980.scala b/tests/neg/i7980.scala
new file mode 100644
index 000000000000..0a7e99f8d0c3
--- /dev/null
+++ b/tests/neg/i7980.scala
@@ -0,0 +1,7 @@
+trait Evidence[X]
+
+trait Trait[X : Evidence]
+  def method(x : X) : X
+
+given ev : Evidence[Int] = new Evidence[Int]{}
+val crash : Trait[Int] = (x: Int) => x          // error