diff --git a/src/harness/agent_loop/mod.rs b/src/harness/agent_loop/mod.rs
index b0e8291..31928c4 100644
--- a/src/harness/agent_loop/mod.rs
+++ b/src/harness/agent_loop/mod.rs
@@ -85,7 +85,7 @@ use crate::harness::model::{
     ChatModel, ModelDelta, ModelRequest, ModelResolutionSource, ModelResponse, ModelStreamItem,
     ResolvedModel, ResolvedModelBinding, ResponseFormat, StreamAccumulator, ToolChoice,
 };
-use crate::harness::runtime::{AgentHarness, UnknownToolPolicy};
+use crate::harness::runtime::{AgentHarness, InvalidArgsPolicy, UnknownToolPolicy};
 use crate::harness::structured::{StructuredExtractor, StructuredStrategy};
 use crate::harness::tool::{Tool, ToolCall, ToolSchema};
 use futures::StreamExt;
diff --git a/src/harness/agent_loop/test.rs b/src/harness/agent_loop/test.rs
index 9627f7a..5336aa4 100644
--- a/src/harness/agent_loop/test.rs
+++ b/src/harness/agent_loop/test.rs
@@ -28,7 +28,7 @@ use crate::harness::model::{
 };
 use crate::harness::providers::MockModel;
 use crate::harness::retry::{FallbackPolicy, RetryPolicy};
-use crate::harness::runtime::{AgentHarness, RunPolicy, UnknownToolPolicy};
+use crate::harness::runtime::{AgentHarness, InvalidArgsPolicy, RunPolicy, UnknownToolPolicy};
 use crate::harness::tool::{Tool, ToolCall, ToolResult, ToolSchema};
 use crate::harness::usage::Usage;
 
@@ -679,6 +679,50 @@ async fn invalid_tool_arguments_fail_before_tool_execution() {
     );
 }
 
+#[tokio::test]
+async fn invalid_tool_arguments_return_tool_error_recovers() {
+    let mut harness: AgentHarness<()> = AgentHarness::new();
+    harness.register_model(
+        "mock",
+        Arc::new(MockModel::with_responses(vec![
+            // `query` is required to be a string; 42 violates the schema, so
+            // admission must recover instead of running the tool or aborting.
+            tool_call_response("call-1", "strict_lookup", json!({ "query": 42 })),
+            text_response("recovered", 1, 1),
+        ])),
+    );
+    let calls = Arc::new(Mutex::new(0));
+    harness.register_tool(Arc::new(StrictLookupTool {
+        calls: Arc::clone(&calls),
+    }));
+    harness.with_policy(RunPolicy {
+        invalid_args: InvalidArgsPolicy::ReturnToolError,
+        ..RunPolicy::default()
+    });
+
+    let run = harness
+        .invoke_default(&(), vec![Message::user("lookup")])
+        .await
+        .expect("invalid arguments are recoverable under ReturnToolError");
+
+    assert_eq!(run.final_response.unwrap().text(), "recovered");
+    assert_eq!(
+        *calls.lock().unwrap(),
+        0,
+        "the tool implementation must not run on invalid arguments"
+    );
+    // The injected tool-error message carries the validation detail so the
+    // model can self-correct on the next turn.
+    let injected = run
+        .messages
+        .iter()
+        .any(|m| format!("{m:?}").contains("invalid arguments for tool `strict_lookup`"));
+    assert!(
+        injected,
+        "recovery message should be injected into the transcript"
+    );
+}
+
 #[tokio::test]
 async fn structured_output_is_extracted() {
     let mut harness: AgentHarness<()> = AgentHarness::new();
diff --git a/src/harness/agent_loop/tools.rs b/src/harness/agent_loop/tools.rs
index cf7e563..c09aa15 100644
--- a/src/harness/agent_loop/tools.rs
+++ b/src/harness/agent_loop/tools.rs
@@ -200,7 +200,35 @@ impl<State: Send + Sync, Ctx: Send + Sync> AgentHarness<State, Ctx> {
                 }
             }
         };
-        tool.schema().validate_call(call)?;
+        if let Err(err) = tool.schema().validate_call(call) {
+            // The model called a registered tool with schema-invalid arguments.
+            // Apply the run's `InvalidArgsPolicy` instead of unconditionally
+            // aborting the turn (mirrors the unknown-tool recovery above).
+            if matches!(self.policy.invalid_args, InvalidArgsPolicy::Fail) {
+                return Err(err);
+            }
+            // `ReturnToolError`: inject a tool-error result carrying the
+            // validation detail and the tool's expected parameter schema, then
+            // continue so the model can correct itself. This consumed one
+            // tool-call budget slot above, bounding the loop.
+            let call_id = CallId::new(call.id.clone());
+            let detail = err.to_string();
+            let schema_repr = serde_json::to_string(&tool.schema().parameters)
+                .unwrap_or_else(|_| "<unserializable>".to_string());
+            let message = format!(
+                "invalid arguments for tool `{}`: {detail}; expected schema: {schema_repr}",
+                call.name
+            );
+            let record = ctx.emit(AgentEvent::InvalidToolArgs {
+                call_id,
+                tool_name: call.name.clone(),
+                arguments: call.arguments.clone(),
+                error: detail,
+                recovery: "tool_error".to_string(),
+            });
+            status.set_last_event(record.id);
+            return Ok(ResolvedToolCall::ErrorMessage(message));
+        }
         Ok(ResolvedToolCall::Tool(tool))
     }
 
diff --git a/src/harness/events/types.rs b/src/harness/events/types.rs
index 45fde2d..11dc981 100644
--- a/src/harness/events/types.rs
+++ b/src/harness/events/types.rs
@@ -182,6 +182,28 @@ pub enum AgentEvent {
         recovery: String,
     },
 
+    /// The model called a *registered* tool with arguments that failed schema
+    /// validation, and the run's
+    /// [`InvalidArgsPolicy`][crate::harness::runtime::InvalidArgsPolicy]
+    /// recovered from it instead of aborting.
+    ///
+    /// Distinct from a tool that ran and returned an error: no tool was
+    /// executed. The tool name, arguments, and validation error are preserved
+    /// so the event stream can drive repair/analysis.
+    InvalidToolArgs {
+        /// Identifier of the offending tool call.
+        call_id: CallId,
+        /// The registered tool whose schema the supplied arguments violated.
+        tool_name: String,
+        /// The raw arguments the model supplied, preserved verbatim so repair
+        /// middleware or analysis can re-target or replay the invocation.
+        arguments: serde_json::Value,
+        /// The schema-validation error detail.
+        error: String,
+        /// How the run recovered (currently always `"tool_error"`).
+        recovery: String,
+    },
+
     /// A per-agent isolated workspace/sandbox was prepared.
     WorkspacePrepared {
         /// Audit identity of the policy that produced the environment.
@@ -575,6 +597,7 @@ impl AgentEvent {
             AgentEvent::ToolStarted { .. } => "tool.started",
             AgentEvent::ToolCompleted { .. } => "tool.completed",
             AgentEvent::UnknownToolCall { .. } => "tool.unknown",
+            AgentEvent::InvalidToolArgs { .. } => "tool.invalid_args",
             AgentEvent::BudgetWarning { .. } => "budget.warning",
             AgentEvent::BudgetReserved { .. } => "budget.reserved",
             AgentEvent::BudgetReconciled { .. } => "budget.reconciled",
diff --git a/src/harness/model/mod.rs b/src/harness/model/mod.rs
index aa24cb1..ea3e6b8 100644
--- a/src/harness/model/mod.rs
+++ b/src/harness/model/mod.rs
@@ -753,10 +753,10 @@ impl StreamAccumulator {
     fn push_tool_chunk(&mut self, call_id: &str, content: &str, tool_name: Option<&str>) {
         if let Some(entry) = self.tool_chunks.iter_mut().find(|(id, ..)| id == call_id) {
             entry.1.push_str(content);
-            if entry.2.is_none() {
-                if let Some(name) = tool_name.filter(|n| !n.is_empty()) {
-                    entry.2 = Some(name.to_string());
-                }
+            if entry.2.is_none()
+                && let Some(name) = tool_name.filter(|n| !n.is_empty())
+            {
+                entry.2 = Some(name.to_string());
             }
         } else {
             self.tool_chunks.push((
diff --git a/src/harness/runtime/types.rs b/src/harness/runtime/types.rs
index 18c7893..2b82fd8 100644
--- a/src/harness/runtime/types.rs
+++ b/src/harness/runtime/types.rs
@@ -73,6 +73,28 @@ pub enum UnknownToolPolicy {
     },
 }
 
+/// How the agent loop reacts when the model calls a *registered* tool with
+/// arguments that fail schema validation.
+///
+/// The default is [`InvalidArgsPolicy::Fail`], preserving the historical
+/// fail-fast behavior where a missing `required` field, wrong type, or bad
+/// `enum` aborts the whole turn. The recoverable variant lets a run keep going
+/// so the model can self-correct — the recovery still consumes a tool-call
+/// budget slot, so [`RunLimits::max_tool_calls`] bounds any invalid-args loop.
+/// Mirrors [`UnknownToolPolicy`] for the schema-validation seam.
+#[derive(Clone, Debug, Default, PartialEq, Eq)]
+pub enum InvalidArgsPolicy {
+    /// Abort the run with
+    /// [`TinyAgentsError::Validation`][crate::error::TinyAgentsError::Validation]
+    /// (the default, historical behavior).
+    #[default]
+    Fail,
+    /// Inject a tool-error result (carrying the validation detail and the
+    /// tool's expected parameter schema) back into the transcript and continue
+    /// the loop, letting the model retry with corrected arguments.
+    ReturnToolError,
+}
+
 /// Controls whether the agent loop captures model and tool **payloads**
 /// (prompt/completion text, tool arguments/results) onto the
 /// [`AgentEvent::ModelCompleted`][crate::harness::events::AgentEvent::ModelCompleted]
@@ -126,6 +148,9 @@ pub struct RunPolicy {
     pub limits: RunLimits,
     /// How the loop reacts to a model call for an unregistered tool.
     pub unknown_tool: UnknownToolPolicy,
+    /// How the loop reacts when a registered tool's arguments fail schema
+    /// validation.
+    pub invalid_args: InvalidArgsPolicy,
     /// Retry policy applied to each model call.
     pub retry: RetryPolicy,
     /// Optional ordered model fallback chain.
@@ -151,6 +176,7 @@ impl Default for RunPolicy {
         Self {
             limits: RunLimits::default(),
             unknown_tool: UnknownToolPolicy::default(),
+            invalid_args: InvalidArgsPolicy::default(),
             retry: RetryPolicy::default(),
             fallback: None,
             default_response_format: None,
diff --git a/src/harness/stream/mod.rs b/src/harness/stream/mod.rs
index 14411f0..1712142 100644
--- a/src/harness/stream/mod.rs
+++ b/src/harness/stream/mod.rs
@@ -143,6 +143,5 @@ pub fn stream(chunks: &[StreamChunk], modes: &[StreamMode]) -> Vec<StreamChunk>
         .collect()
 }
 
-#[cfg(test)]
 #[cfg(test)]
 mod test;