B5. Exceptions & Disputes

Core Principle

Evidence decides. When an issue arises, only the affected transaction is paused, the record is assembled, and resolution is fast and transparent. Paid slices remain paid; future slices await a clean record. Rule: No EMT, no funds.

Summary

Exceptions in EDMA are triggered by three events: a buyer blocks a release during the review window, a milestone gate fails, or a previously accepted document is revoked. In all cases, only the affected slice and any dependent future slices are frozen. Already-paid slices are never clawed back unless there is proven fraud. Resolution is evidence-driven: a Dispute Pack is assembled—including the contract checklist, all submitted evidence, timestamps, One-Claim checks, and the variance rule from the MPA.

The platform re-inspects if necessary, applies the contract’s logic, and delivers a clear outcome—resume, partial pay, deduction, replacement, or refund. Locked EDSD remains locked until the issue is resolved, while Unlocked EDSD continues to pay EDMA invoices; off-platform cash-out stays disabled until the seller’s schedule completes. Service levels are enforced with fast acknowledgements, short evidence windows, and auto-escalation to a neutral if deadlines are missed.

How an Exception Starts

Exceptions begin in one of three ways:

• Buyer Block: The buyer blocks a release during the short review window (up to four hours) if evidence is missing or incorrect. The platform pauses the release and opens a case with a plain-English reason.

• Gate Fail: A milestone gate fails because proof is insufficient—such as a seal mismatch, QA variance, or shelf-life shortfall. The stage turns red, shows the reason, and details what must be fixed.

• Revocation After Pass: A document supporting a previously passed gate is revoked or contradicted (for example, an inspector withdraws a report). EDMA freezes all dependent future slices, but already-paid slices remain paid.

Scope of Freezes

The freeze is always narrow: only the affected slice and its dependents are paused. Funded-on-proof assignments linked to a frozen slice remain pending; other suppliers or lots are not touched. Paid slices are never reversed except in cases of proven fraud.

Dispute Pack & Resolution

Every case is resolved using a Dispute Pack that includes:

• The contract checklist for the milestone (definition of “pass”)

• All evidence and hashes

• A timeline of uploads

• One-Claim verification

• Proposed fixes from the party opening the case

• The relevant variance rule from the MPA

All parties see the same information—nothing is hidden in email threads. The contract’s variance logic is applied objectively: for short-shipment, payment is pro-rated by delivered units; for damage, deductions follow the agreed formula; shelf-life shortfalls or cold-chain failures are handled as the MPA prescribes, which may include partial pay, replacement, or cancellation. Documentation mismatches must be corrected before release; missed deadlines may trigger re-routing or partial cancelation.

Possible Outcomes

Once evidence is reviewed and, if necessary, re-inspected, the platform applies one of several outcomes:

• Resume as-is: Evidence fixed, gate passes, EMT mints, slice unlocks and pays.

• Partial pay: Variance formula applied, EMT mints for adjusted amount, remainder canceled or rescheduled.

• Deduct & release: Specific charges deducted, reduced slice pays.

• Replacement: Sub-lot re-shipped; Locked EDSD re-binds to replacement, pays on gate pass.

• Cancel & refund: If unfixable, frozen Locked EDSD reverts to buyer; downstream slices unlock or rebalance.

Cost Allocation

Responsibility for costs is determined by the source of the issue:

• If the supplier is at fault, re-inspection or re-work costs are deducted from future payouts.

• If the buyer is at fault (e.g., late pickup causing demurrage), costs are debited from the buyer’s buffer.

• Shared or unknown fault is split as defined in the MPA or by a neutral’s decision.

Process Timelines & Escalation

Cases move quickly through a structured timeline:

• Within two hours, the platform shares the Dispute Pack with both sides.

• The responsible party has twelve to twenty-four hours to submit missing evidence or request re-inspection.

• Re-inspection, if needed, takes up to seventy-two hours, and a platform decision follows within twenty-four hours after that.

• If deadlines are missed, the case escalates to the named neutral in the MPA, whose decision is binding and permanently recorded on the proof page.

Brand, Compliance & Fraud

For branded goods, missing authorization results in a freeze until proof is provided; repeat violations trigger suspension. In cases of counterfeit risk or grey imports, all related slices are frozen until brand confirmation is received.

• Deliberate falsification—such as fake documents or tampered photos—results in immediate suspension, clawback from any current or future Unlocked EDSD, and reporting to authorities as required.

Visibility & Transparency

Throughout the dispute, buyers and sellers see the same information: the reason for the freeze, the required fix, and countdown timers for service levels. Both parties work within a single case thread, with files, timestamps, re-inspection slots, and the platform’s or neutral’s decision documented for audit and operations.

Fees & Financial Handling

The protocol fee is always pre-paid, and EDMA burns 50% only when the slice actually releases. There are no extra dispute fees. Seller fees apply only when money moves: 1% on funded-on-proof assignments (when they settle) and 0.5% on off-platform cash-out (at schedule completion). Treasury interest from Locked EDSD accrues as normal and is reported as platform revenue.

Edge Cases

• If a gate is ready to release but funds are pending, the release waits for the top-up.

• One-Claim prevents duplicate evidence use, closing cases with a block rather than a payment.

• In multi-supplier programs, only the affected supplier’s slices freeze; others continue as normal.

Plain-Language Promise

Exceptions are handled as checklists, not conflicts. Fix the file, pass re-inspection, and keep moving. Only affected transactions pause, nothing releases early, and every action is recorded for audit and operations. No EMT, no funds.