diff --git a/server/dapp/dapp.js b/server/dapp/dapp.js
index ae2354d..c943ed6 100644
--- a/server/dapp/dapp.js
+++ b/server/dapp/dapp.js
@@ -158,6 +158,18 @@ function* receiveProject(userManager, projectManager, projectName) {
   return result;
 }
 
+// receive project
+function* rejectProject(userManager, projectManager, projectName, buyerName) {
+    rest.verbose('dapp: rejectProject', projectName);
+    // get the accepted bid
+    const bid = yield projectManager.getAcceptedBid(projectName);
+    // get the buyer who created the project
+    const buyer = yield userManager.getUser(buyerName);
+    // Reject the project:  change state to REJECTED and send money back to the buyer
+    const result = yield projectManager.rejectProject(projectName, bid.address, buyer.account);
+    return result;
+}
+
 // handle project event
 function* handleEvent(userManager, projectManager, args) {
   const name = args.name;
@@ -167,6 +179,9 @@ function* handleEvent(userManager, projectManager, args) {
       case ProjectEvent.RECEIVE:
         return yield receiveProject(userManager, projectManager, args.projectName);
 
+      case ProjectEvent.REJECT:
+          return yield rejectProject(userManager, projectManager, args.projectName, args.username);
+
       case ProjectEvent.ACCEPT:
         return yield acceptBid(userManager, projectManager, args.username, args.password, args.bidId, args.projectName);
 
diff --git a/server/lib/bid/contracts/Bid.sol b/server/lib/bid/contracts/Bid.sol
index 3263bb9..00bfc6c 100644
--- a/server/lib/bid/contracts/Bid.sol
+++ b/server/lib/bid/contracts/Bid.sol
@@ -45,11 +45,26 @@ contract Bid is ErrorCodes, BidState {
     if (this.balance < amount) {
       return ErrorCodes.INSUFFICIENT_BALANCE;
     }
-    uint fee = 10000000 wei; // supplier absorbs the fee
+    uint fee = 0 wei; // supplier absorbs the fee
     uint amountWei = amount * 1 ether;
 
     // transfer will throw
     supplierAddress.send(amountWei-fee);
     return ErrorCodes.SUCCESS;
   }
-}
+
+  //this function rejects the order in transit and sends funds back to the buyer
+  //note, having anybody able to call this function is bad security practice, but is done for simplicity in this sample app
+  function reject(address buyerAddress) returns (ErrorCodes) {
+    // confirm balance, to return error
+    if (this.balance < amount) {
+      return ErrorCodes.INSUFFICIENT_BALANCE;
+    }
+
+    uint amountWei = amount * 1 ether;
+
+    // transfer will throw
+    buyerAddress.send(amountWei);
+    return ErrorCodes.SUCCESS;
+  }
+}
\ No newline at end of file
diff --git a/server/lib/bid/test/bid.test.js b/server/lib/bid/test/bid.test.js
index 1c01eed..4f0f65f 100644
--- a/server/lib/bid/test/bid.test.js
+++ b/server/lib/bid/test/bid.test.js
@@ -43,6 +43,7 @@ describe('Bid tests', function() {
     assert.equal(bid.name, name, 'name');
     assert.equal(bid.supplier, supplier, 'supplier');
     assert.equal(bid.amount, amount, 'amount');
+    assert.equal(bid.buyer, admin.address, 'buyer');
   });
 
   it('Search Contract', function* () {
diff --git a/server/lib/project/contracts/ProjectEvent.sol b/server/lib/project/contracts/ProjectEvent.sol
index 9e27614..e190213 100644
--- a/server/lib/project/contracts/ProjectEvent.sol
+++ b/server/lib/project/contracts/ProjectEvent.sol
@@ -4,6 +4,7 @@ contract ProjectEvent {
         NULL,
         ACCEPT,
         DELIVER,
-        RECEIVE
+        RECEIVE,
+        REJECT
     }
 }
diff --git a/server/lib/project/contracts/ProjectManager.sol b/server/lib/project/contracts/ProjectManager.sol
index 63c91f0..b6c1bda 100644
--- a/server/lib/project/contracts/ProjectManager.sol
+++ b/server/lib/project/contracts/ProjectManager.sol
@@ -98,6 +98,18 @@ contract ProjectManager is ErrorCodes, Util, ProjectState, ProjectEvent, BidStat
     return bid.settle(supplierAddress);
   }
 
+  function rejectProject(string name, address bidAddress, address buyerAddress) returns (ErrorCodes) {
+    // validity
+    if (!exists(name)) return (ErrorCodes.NOT_FOUND);
+    // set project state
+    address projectAddress = getProject(name);
+    var (errorCode, state) = handleEvent(projectAddress, ProjectEvent.REJECT);
+    if (errorCode != ErrorCodes.SUCCESS) return errorCode;
+    // reject
+    Bid bid = Bid(bidAddress);
+    return bid.reject(buyerAddress);
+  }
+
   /**
    * handleEvent - transition project to a new state based on incoming event
    */
@@ -133,6 +145,8 @@ contract ProjectManager is ErrorCodes, Util, ProjectState, ProjectEvent, BidStat
     if (state == ProjectState.INTRANSIT) {
       if (projectEvent == ProjectEvent.RECEIVE)
         return (ErrorCodes.SUCCESS, ProjectState.RECEIVED);
+      if (projectEvent == ProjectEvent.REJECT)
+        return (ErrorCodes.SUCCESS, ProjectState.REJECTED);
     }
     return (ErrorCodes.ERROR, state);
   }
diff --git a/server/lib/project/contracts/ProjectState.sol b/server/lib/project/contracts/ProjectState.sol
index e4fa8c6..c88b9d2 100644
--- a/server/lib/project/contracts/ProjectState.sol
+++ b/server/lib/project/contracts/ProjectState.sol
@@ -5,6 +5,7 @@ contract ProjectState {
         OPEN,
         PRODUCTION,
         INTRANSIT,
-        RECEIVED
+        RECEIVED,
+        REJECTED
     }
 }
diff --git a/server/lib/project/projectManager.js b/server/lib/project/projectManager.js
index 8b74a0c..b21b3b2 100644
--- a/server/lib/project/projectManager.js
+++ b/server/lib/project/projectManager.js
@@ -62,6 +62,9 @@ function setContract(admin, contract) {
   contract.settleProject = function* (projectName, supplierAddress, bidAddress) {
     return yield settleProject(admin, contract, projectName, supplierAddress, bidAddress);
   }
+  contract.rejectProject = function* (projectName, bidAddress, buyerAddress) {
+    return yield rejectProject(admin, contract, projectName, bidAddress, buyerAddress);
+  }
   contract.getAcceptedBid = getAcceptedBid;
 
   return contract;
@@ -205,6 +208,22 @@ function* settleProject(admin, contract, projectName, supplierAddress, bidAddres
   }
 }
 
+function* rejectProject(admin, contract, projectName, bidAddress, buyerAddress) {
+  rest.verbose('rejectProject', {projectName, bidAddress, buyerAddress});
+  const method = 'rejectProject';
+  const args = {
+    name: projectName,
+    bidAddress: bidAddress,
+    buyerAddress: buyerAddress,
+  };
+
+  const result = yield rest.callMethod(admin, contract, method, args);
+  const errorCode = parseInt(result[0]);
+  if (errorCode != ErrorCodes.SUCCESS) {
+    throw new Error(errorCode);
+  }
+}
+
 function* getBid(bidId) {
   rest.verbose('getBid', bidId);
   return (yield rest.waitQuery(`Bid?id=eq.${bidId}`,1))[0];
diff --git a/server/lib/project/test/projectManager.test.js b/server/lib/project/test/projectManager.test.js
index 13cc7b9..4887039 100644
--- a/server/lib/project/test/projectManager.test.js
+++ b/server/lib/project/test/projectManager.test.js
@@ -456,7 +456,7 @@ describe('ProjectManager Life Cycle tests', function() {
     assert.equal(filtered.length, 1, 'one and only one');
   });
 
-  it.skip('Accept a Bid (send funds into accepted bid), rejects the others, receive project, settle (send bid funds to supplier)', function* () {
+  it('Accept a Bid (send funds into accepted bid), rejects the others, receive project, settle (send bid funds to supplier)', function* () {
     const uid = util.uid();
     const projectArgs = createProjectArgs(uid);
     const password = '1234';
@@ -470,7 +470,7 @@ describe('ProjectManager Life Cycle tests', function() {
     const buyer = yield userManagerContract.createUser(buyerArgs);
     buyer.password = password; // IRL this will be a prompt to the buyer
     // create suppliers
-    const suppliers = yield createSuppliers(3, password, uid);
+    const suppliers = yield createSuppliers(1, password, uid);
 
     // create project
     const project = yield contract.createProject(projectArgs);
@@ -513,13 +513,83 @@ describe('ProjectManager Life Cycle tests', function() {
       if (supplier.username == acceptedBid.supplier) {
         // the winning supplier should have the bid amount minus the tx fee
         const delta = supplier.balance.minus(FAUCET_AWARD);
-        const fee = new BigNumber(10000000);
-        delta.should.be.bignumber.eq(amountWei.minus(fee));
+        delta.should.be.bignumber.eq(amountWei);
       } else {
         // everyone else should have the otiginal value
         supplier.balance.should.be.bignumber.eq(FAUCET_AWARD);
       }
     }
+    yield rest.getState(acceptedBid);
+  });
+
+  it.only('Accept a Bid (send funds into accepted bid), rejects the others, receive project, reject (send bid funds back to supplier)', function* () {
+    const uid = util.uid();
+    const projectArgs = createProjectArgs(uid);
+    const password = '1234';
+    const amount = 23;
+    const amountWei = new BigNumber(amount).times(constants.ETHER);
+    const FAUCET_AWARD = new BigNumber(1000).times(constants.ETHER) ;
+    const GAS_LIMIT = new BigNumber(100000000); // default in bockapps-rest
+
+    // create buyer and suppliers
+    const buyerArgs = createUserArgs(projectArgs.buyer, password, UserRole.BUYER);
+    const buyer = yield userManagerContract.createUser(buyerArgs);
+    buyer.password = password; // IRL this will be a prompt to the buyer
+    // create suppliers
+    const suppliers = yield createSuppliers(1, password, uid);
+
+    // create project
+    const project = yield contract.createProject(projectArgs);
+    // create bids
+    const createdBids = yield createMultipleBids(projectArgs.name, suppliers, amount);
+    { // test
+      const bids = yield projectManagerJs.getBidsByName(projectArgs.name);
+      assert.equal(createdBids.length, bids.length, 'should find all the created bids');
+    }
+    // get the buyers balance before accepting a bid
+    buyer.initialBalance = yield userManagerContract.getBalance(buyer.username);
+    buyer.initialBalance.should.be.bignumber.eq(FAUCET_AWARD);
+    // accept one bid (the first)
+    const acceptedBid = createdBids[0];
+    yield contract.acceptBid(buyer, acceptedBid.id, projectArgs.name);
+    // get the buyers balance after accepting a bid
+    buyer.balance = yield userManagerContract.getBalance(buyer.username);
+    const delta = buyer.initialBalance.minus(buyer.balance);
+    delta.should.be.bignumber.gte(amountWei); // amount + fee
+    delta.should.be.bignumber.lte(amountWei.plus(GAS_LIMIT)); // amount + max fee (gas-limit)
+    // get the bids
+    const bids = yield projectManagerJs.getBidsByName(projectArgs.name);
+    // check that the expected bid is ACCEPTED and all others are REJECTED
+    bids.map(bid => {
+      if (bid.id === acceptedBid.id) {
+        assert.equal(parseInt(bid.state), BidState.ACCEPTED, 'bid should be ACCEPTED');
+      } else {
+        assert.equal(parseInt(bid.state), BidState.REJECTED, 'bid should be REJECTED');
+      };
+    });
+    // deliver the project
+    const projectState = yield contract.handleEvent(projectArgs.name, ProjectEvent.DELIVER);
+    assert.equal(projectState, ProjectState.INTRANSIT, 'delivered project should be INTRANSIT ');
+    // receive the project
+    yield rejectProject(projectArgs.name, buyer.username);
+
+    // get the suppliers balances
+    for (let supplier of suppliers) {
+      supplier.balance = yield userManagerContract.getBalance(supplier.username);
+      if (supplier.username == acceptedBid.supplier) {
+        // the winning supplier should NOT have the bid amount
+        const delta = supplier.balance.minus(FAUCET_AWARD);
+        delta.should.be.bignumber.eq(0);
+      } else {
+        // everyone else should have the original value
+        supplier.balance.should.be.bignumber.eq(FAUCET_AWARD);
+      }
+    }
+
+    //we're just saying up to 1 ether is used for gas fees for testing purposes. The actual amount of gas used will be much lower.
+    const expectedValueFloor = buyer.initialBalance.minus(constants.ETHER);
+    buyer.balance.should.be.bignumber.lte(buyer.initialBalance); //accounting for gas fees we should be less than our initial balance
+    buyer.balance.should.be.bignumber.gte(expectedValueFloor); //we should be larger though than if we had still had 23 eth locked in escrow
   });
 
   function* createSuppliers(count, password, uid) {
@@ -544,6 +614,17 @@ describe('ProjectManager Life Cycle tests', function() {
     yield contract.settleProject(projectName, supplier.account, bid.address);
   }
 
+  // throws: ErrorCodes
+  function* rejectProject(projectName, buyerName) {
+    rest.verbose('rejectProject', projectName);
+    // get the accepted bid
+    const bid = yield projectManagerJs.getAcceptedBid(projectName);
+    // get the supplier for the accepted bid
+    const buyer = yield userManagerContract.getUser(buyerName);
+    // Settle the project: change state to REJECTED and send the funds back to the buyer
+    yield contract.rejectProject(projectName, bid.address, buyer.address);
+  }
+
 });
 
 // function createUser(address account, string username, bytes32 pwHash, UserRole role) returns (ErrorCodes) {
diff --git a/ui/src/constants.js b/ui/src/constants.js
index 69d53f4..7db0d0c 100644
--- a/ui/src/constants.js
+++ b/ui/src/constants.js
@@ -23,10 +23,15 @@ export const STATES = {
     state: 'RECEIVED',
     icon: 'mood'
   },
+  5: {
+    state: 'REJECTED',
+    icon: 'mood_bad'
+  },
   OPEN: 1,
   PRODUCTION: 2,
   INTRANSIT: 3,
   RECEIVED: 4,
+  REJECTED: 5,
 }
 
 export const BID_STATES = {
@@ -38,4 +43,4 @@ export const BID_STATES = {
   REJECTED: 3,
 }
 
-export const PROJECT_EVENTS = ['NULL', 'Accepted', 'Shipped', 'Received']
+export const PROJECT_EVENTS = ['NULL', 'Accepted', 'Shipped', 'Received', 'Rejected']
diff --git a/ui/src/scenes/Projects/components/Project/index.js b/ui/src/scenes/Projects/components/Project/index.js
index 30e6c1a..23ae442 100644
--- a/ui/src/scenes/Projects/components/Project/index.js
+++ b/ui/src/scenes/Projects/components/Project/index.js
@@ -58,6 +58,7 @@ class Project extends Component {
       if (this.isBuyer) {
 
         if (parseInt(project.state, 10) === STATES.INTRANSIT) {
+          //the 3 is a receive event and the 4 is a REJECT event (see ProjectEvent.sol)
           actions.push(
             <Button
               icon
@@ -67,7 +68,16 @@ class Project extends Component {
               key="mood"
             >
               mood
-              </Button>
+              </Button>,
+              <Button
+              icon
+              primary
+              onClick={(e) => this.handleProjectEventClick(e, project.name, 4)}
+              tooltipLabel="Mark as Rejected"
+              key="mood_bad"
+            >
+              mood_bad
+              </Button>,
           );
         }
       }