diff --git a/headertest/dummy_header.go b/headertest/dummy_header.go
index 64d21f22..e8480dde 100644
--- a/headertest/dummy_header.go
+++ b/headertest/dummy_header.go
@@ -27,6 +27,9 @@ type DummyHeader struct {
 	// VerifyFailure allows for testing scenarios where a header would fail
 	// verification. When set to true, it forces a failure.
 	VerifyFailure bool
+	// SoftFailure allows for testing scenarios where a header would fail
+	// verification with SoftFailure set to true
+	SoftFailure bool
 }
 
 func RandDummyHeader(t *testing.T) *DummyHeader {
@@ -96,11 +99,10 @@ func (d *DummyHeader) IsExpired(period time.Duration) bool {
 	return expirationTime.Before(time.Now())
 }
 
-func (d *DummyHeader) Verify(header *DummyHeader) error {
-	if header.VerifyFailure {
-		return ErrDummyVerify
+func (d *DummyHeader) Verify(hdr *DummyHeader) error {
+	if hdr.VerifyFailure {
+		return &header.VerifyError{Reason: ErrDummyVerify, SoftFailure: hdr.SoftFailure}
 	}
-
 	return nil
 }
 
diff --git a/p2p/exchange.go b/p2p/exchange.go
index c4dd8289..af0bf100 100644
--- a/p2p/exchange.go
+++ b/p2p/exchange.go
@@ -3,6 +3,7 @@ package p2p
 import (
 	"bytes"
 	"context"
+	"errors"
 	"fmt"
 	"math/rand"
 	"sort"
@@ -155,12 +156,20 @@ func (ex *Exchange[H]) Head(ctx context.Context, opts ...header.HeadOption[H]) (
 			if useTrackedPeers {
 				err = reqParams.TrustedHead.Verify(headers[0])
 				if err != nil {
-					log.Errorw("verifying head received from tracked peer", "tracked peer", from,
-						"height", headers[0].Height(), "err", err)
+					var verErr *header.VerifyError
+					if errors.As(err, &verErr) && verErr.SoftFailure {
+						log.Debugw("received head from tracked peer that soft-failed verification",
+							"tracked peer", from, "err", err)
+						headerRespCh <- headers[0]
+						return
+					}
 					// bad head was given, block peer
 					ex.peerTracker.blockPeer(from, fmt.Errorf("returned bad head: %w", err))
+					log.Errorw("verifying head received from tracked peer", "tracked peer", from,
+						"height", headers[0].Height(), "err", err)
 					headerRespCh <- zero
 					return
+
 				}
 			}
 			// request ensures that the result slice will have at least one Header
diff --git a/p2p/exchange_test.go b/p2p/exchange_test.go
index 6b81f529..35d70d72 100644
--- a/p2p/exchange_test.go
+++ b/p2p/exchange_test.go
@@ -88,6 +88,50 @@ func TestExchange_RequestHead(t *testing.T) {
 	}
 }
 
+// TestExchange_RequestHead_SoftFailure tests that the exchange still processes
+// a Head response that has a SoftFailure.
+func TestExchange_RequestHead_SoftFailure(t *testing.T) {
+	ctx, cancel := context.WithCancel(context.Background())
+	t.Cleanup(cancel)
+
+	hosts := createMocknet(t, 3)
+	exchg, _ := createP2PExAndServer(t, hosts[0], hosts[1])
+
+	// create a tracked peer
+	suite := headertest.NewTestSuite(t)
+	trackedStore := headertest.NewStore[*headertest.DummyHeader](t, suite, 50)
+	// create a header that will SoftFail verification and append it to tracked
+	// peer's store
+	hdr := suite.GenDummyHeaders(1)[0]
+	hdr.VerifyFailure = true
+	hdr.SoftFailure = true
+	err := trackedStore.Append(ctx, hdr)
+	require.NoError(t, err)
+	// start the tracked peer's server
+	serverSideEx, err := NewExchangeServer[*headertest.DummyHeader](hosts[2], trackedStore,
+		WithNetworkID[ServerParameters](networkID),
+	)
+	require.NoError(t, err)
+	err = serverSideEx.Start(ctx)
+	require.NoError(t, err)
+	t.Cleanup(func() {
+		err = serverSideEx.Stop(ctx)
+		require.NoError(t, err)
+	})
+
+	// get first subjective head from trusted peer to initialize the
+	// exchange's store
+	var head header.Header[*headertest.DummyHeader]
+	head, err = exchg.Head(ctx)
+	require.NoError(t, err)
+
+	// now use that trusted head to request a new head from the exchange
+	// from the tracked peer
+	softFailHead, err := exchg.Head(ctx, header.WithTrustedHead(head))
+	require.NoError(t, err)
+	assert.Equal(t, trackedStore.HeadHeight, softFailHead.Height())
+}
+
 func TestExchange_RequestHead_UnresponsivePeer(t *testing.T) {
 	ctx, cancel := context.WithCancel(context.Background())
 	t.Cleanup(cancel)