diff --git a/cli.py b/cli.py
index 069b3c616c1..379ca15df1a 100644
--- a/cli.py
+++ b/cli.py
@@ -543,6 +543,8 @@ def load_cli_config() -> Dict[str, Any]:
                 if key == "model":
                     continue  # Already handled above
                 if key in file_config:
+                    if isinstance(defaults[key], dict) and file_config[key] is None:
+                        continue
                     if isinstance(defaults[key], dict) and isinstance(file_config[key], dict):
                         defaults[key].update(file_config[key])
                     else:
diff --git a/tests/hermes_cli/test_config_env_expansion.py b/tests/hermes_cli/test_config_env_expansion.py
index acc41da7c46..75ef62592d1 100644
--- a/tests/hermes_cli/test_config_env_expansion.py
+++ b/tests/hermes_cli/test_config_env_expansion.py
@@ -150,6 +150,18 @@ class TestLoadConfigCacheEnvStaleness:
 class TestLoadCliConfigExpansion:
     """Verify that load_cli_config() also expands ${VAR} references."""
 
+    def test_cli_config_ignores_empty_terminal_section(self, tmp_path, monkeypatch):
+        config_file = tmp_path / "config.yaml"
+        config_file.write_text("terminal:\n")
+
+        monkeypatch.setattr("cli._hermes_home", tmp_path)
+
+        from cli import load_cli_config
+        config = load_cli_config()
+
+        assert isinstance(config["terminal"], dict)
+        assert config["terminal"]["env_type"] == "local"
+
     def test_cli_config_expands_auxiliary_api_key(self, tmp_path, monkeypatch):
         config_yaml = (
             "auxiliary:\n"