Explain how to handle rejeceted events

specification/server_server_api.rst

@@ -472,6 +472,24 @@ The rules are as follows:
 
   I think there is some magic about 3pid invites too.
 
+Rejection
++++++++++
+
+If an event is rejected it should neither be relayed to clients nor be included
+as a prev event in any new events generated by the server. Subsequent events
+from other servers that reference rejected events should be allowed if they
+still pass the auth rules. The state used in the checks should be calculated as
+normal, except not updating with the rejected event where it is a state event.
+
+If an event in an incoming transaction is rejected, this should not cause the
+transaction request to be responded to with an error response.
+
+.. NOTE::
+
+    This means that events may be included in the room DAG even though they
+    should be rejected.
+
+
 Retrieving event authorization information
 ++++++++++++++++++++++++++++++++++++++++++