diff --git a/contracts/invoice-escrow/src/lib.rs b/contracts/invoice-escrow/src/lib.rs
index c654064..f96f7bf 100644
--- a/contracts/invoice-escrow/src/lib.rs
+++ b/contracts/invoice-escrow/src/lib.rs
@@ -75,6 +75,7 @@ impl InvoiceEscrow {
             paused: false,
             whitelist_enabled: false,
             min_investment: 0,
+            dispute_timeout_secs: 604_800,
         };
         storage::set_config(&env, &config);
         Ok(())
@@ -876,6 +877,140 @@ impl InvoiceEscrow {
         Ok(config.paused)
     }
 
+    /// Raise a dispute on a Funded escrow.
+    pub fn raise_dispute(
+        env: Env,
+        caller: Address,
+        invoice_id: Symbol,
+        reason: soroban_sdk::Bytes,
+    ) -> Result<(), Error> {
+        caller.require_auth();
+        let config = storage::get_config(&env).ok_or(Error::NotInit)?;
+        ensure_not_paused(&config)?;
+
+        let mut data = storage::get_escrow(&env, invoice_id.clone()).ok_or(Error::EscrowNotFound)?;
+        if data.status != EscrowStatus::Funded {
+            return Err(Error::EscrowNotFunded); 
+        }
+
+        let dispute = types::DisputeData {
+            raiser: caller.clone(),
+            reason: reason.clone(),
+            raised_at: env.ledger().timestamp(),
+            resolved: false,
+        };
+        storage::set_dispute(&env, &invoice_id, &dispute);
+
+        data.status = EscrowStatus::Disputed;
+        storage::set_escrow(&env, invoice_id.clone(), &data);
+
+        events::dispute_raised(&env, invoice_id.clone(), &caller, &reason);
+        events::escrow_status_changed(&env, invoice_id, EscrowStatus::Disputed, env.ledger().timestamp());
+        Ok(())
+    }
+
+    /// Resolve a dispute by admin or via timeout.
+    pub fn resolve_dispute(
+        env: Env,
+        admin: Address,
+        invoice_id: Symbol,
+        favour: Symbol,
+    ) -> Result<(), Error> {
+        admin.require_auth();
+        let config = storage::get_config(&env).ok_or(Error::NotInit)?;
+        if config.admin != admin {
+            return Err(Error::Unauthorized);
+        }
+
+        let mut data = storage::get_escrow(&env, invoice_id.clone()).ok_or(Error::EscrowNotFound)?;
+        if data.status != EscrowStatus::Disputed {
+            return Err(Error::NotDisputed);
+        }
+
+        let mut dispute = storage::get_dispute(&env, &invoice_id).ok_or(Error::NotDisputed)?;
+        if dispute.resolved {
+            return Err(Error::AlreadyResolved);
+        }
+
+        let current_ts = env.ledger().timestamp();
+        let timeout = dispute.raised_at.saturating_add(config.dispute_timeout_secs);
+        
+        let actual_favour = if current_ts > timeout {
+            Symbol::new(&env, "buyer")
+        } else {
+            favour.clone()
+        };
+
+        if actual_favour != Symbol::new(&env, "buyer") && actual_favour != Symbol::new(&env, "seller") {
+            return Err(Error::Unauthorized);
+        }
+
+        dispute.resolved = true;
+        storage::set_dispute(&env, &invoice_id, &dispute);
+
+        let token = token::Client::new(&env, &data.token);
+        let contract = env.current_contract_address();
+
+        if actual_favour == Symbol::new(&env, "buyer") {
+            let amount_to_refund = data.funded_amt;
+            let funder_opt = data.funder.clone();
+            
+            if let Some(distributor) = config.payment_distributor.as_ref() {
+                token.transfer(&contract, distributor, &amount_to_refund);
+                env.invoke_contract::<()>(
+                    distributor,
+                    &Symbol::new(&env, DISTRIBUTE_REFUND_FN),
+                    soroban_sdk::vec![
+                        &env,
+                        contract.to_val(),
+                        invoice_id.clone().into_val(&env),
+                        soroban_sdk::vec![
+                            &env,
+                            <Address as IntoVal<Env, soroban_sdk::Val>>::into_val(&data.token, &env),
+                            <Option<Address> as IntoVal<Env, soroban_sdk::Val>>::into_val(&funder_opt, &env)
+                        ].into_val(&env),
+                        soroban_sdk::vec![&env, amount_to_refund].into_val(&env),
+                        (EscrowStatus::Refunded as u32).into_val(&env)
+                    ],
+                );
+            } else {
+                if let Some(funder) = &funder_opt {
+                    if data.funded_amt > 0 {
+                        let funder_amt = storage::get_funder_amount(&env, invoice_id.clone(), funder);
+                        let pro_rata_refund = amount_to_refund
+                            .checked_mul(funder_amt)
+                            .unwrap_or(0)
+                            .checked_div(data.funded_amt)
+                            .unwrap_or(0);
+                        if pro_rata_refund > 0 {
+                            token.transfer(&contract, funder, &pro_rata_refund);
+                        }
+                    }
+                }
+            }
+            data.status = EscrowStatus::Refunded;
+            events::escrow_refunded(&env, invoice_id.clone(), amount_to_refund);
+        } else {
+            if data.funded_amt > 0 {
+                token.transfer(&contract, &data.seller, &data.funded_amt);
+            }
+            data.status = EscrowStatus::Settled;
+            events::payment_settled(&env, invoice_id.clone(), data.funded_amt, 0, 0);
+        }
+
+        storage::set_escrow(&env, invoice_id.clone(), &data);
+        
+        env.invoke_contract::<()>(
+            &data.inv_token,
+            &Symbol::new(&env, "set_transfer_locked"),
+            soroban_sdk::vec![&env, contract.to_val(), false.into_val(&env)],
+        );
+
+        events::dispute_resolved(&env, invoice_id.clone(), &admin, actual_favour);
+        events::escrow_status_changed(&env, invoice_id, data.status, current_ts);
+        Ok(())
+    }
+
     /// Admin-only: configure the emergency multi-sig admin set and threshold.
     pub fn set_emergency_config(
         env: Env,
diff --git a/contracts/invoice-escrow/src/storage.rs b/contracts/invoice-escrow/src/storage.rs
index 43e0c3c..0d1b7d8 100644
--- a/contracts/invoice-escrow/src/storage.rs
+++ b/contracts/invoice-escrow/src/storage.rs
@@ -321,4 +321,4 @@ pub fn set_escrow_id_by_index(env: &soroban_sdk::Env, index: u32, invoice_id: &S
     env.storage()
         .persistent()
         .set(&StorageKey::EscrowIdByIndex(index), invoice_id);
-}
\ No newline at end of file
+}
diff --git a/contracts/invoice-escrow/src/types.rs b/contracts/invoice-escrow/src/types.rs
index 8cd3362..847a33b 100644
--- a/contracts/invoice-escrow/src/types.rs
+++ b/contracts/invoice-escrow/src/types.rs
@@ -76,6 +76,8 @@ pub struct Config {
     /// `0` disables the floor (only `amount > 0` is required). Completing the
     /// remaining capacity below this floor is always allowed.
     pub min_investment: i128,
+    /// Dispute timeout in seconds before default fallback triggers (default: 604800s / 7 days).
+    pub dispute_timeout_secs: u64,
 }
 
 /// Lifecycle status of an escrow.
@@ -95,6 +97,18 @@ pub enum EscrowStatus {
     /// Cancelled by seller while still in Created state and never funded
     /// (locked out once any investor contribution has been received).
     Cancelled = 4,
+    /// Dispute raised by buyer or seller, awaiting admin resolution.
+    Disputed = 5,
+}
+
+/// Metadata for a raised dispute.
+#[contracttype]
+#[derive(Clone, Debug, Eq, PartialEq)]
+pub struct DisputeData {
+    pub raiser: soroban_sdk::Address,
+    pub reason: soroban_sdk::Bytes,
+    pub raised_at: u64,
+    pub resolved: bool,
 }
 
 /// Per-invoice escrow data stored in persistent storage.
diff --git a/contracts/payment-distributor/src/events.rs b/contracts/payment-distributor/src/events.rs
index 0ffe2c5..e63debd 100644
--- a/contracts/payment-distributor/src/events.rs
+++ b/contracts/payment-distributor/src/events.rs
@@ -9,6 +9,11 @@ pub fn initialized(env: &Env, admin: &Address) {
     env.events().publish(topics, admin.clone());
 }
 
+pub fn admin_transferred(env: &Env, previous_admin: &Address, new_admin: &Address) {
+    let topics = (Symbol::new(env, "admin_transferred"),);
+    env.events().publish(topics, (previous_admin.clone(), new_admin.clone()));
+}
+
 /// Issue #122: Fee recipient updated event
 pub fn fee_recipient_updated(env: &Env, old_recipient: Option<Address>, new_recipient: &Address) {
     let topics = (Symbol::new(env, "fee_recipient_updated"),);
diff --git a/contracts/payment-distributor/src/lib.rs b/contracts/payment-distributor/src/lib.rs
index 53982de..a8c5935 100644
--- a/contracts/payment-distributor/src/lib.rs
+++ b/contracts/payment-distributor/src/lib.rs
@@ -627,6 +627,35 @@ impl PaymentDistributor {
         storage::get_admin(&env).ok_or(Error::NotInit)
     }
 
+    /// Issue #380: Transfer admin ownership (Step 1).
+    /// Proposes a new admin. The new admin must call `accept_admin` to finalize.
+    pub fn transfer_admin(env: Env, current_admin: Address, new_admin: Address) -> Result<(), Error> {
+        let stored_admin = storage::get_admin(&env).ok_or(Error::NotInit)?;
+        if current_admin != stored_admin {
+            return Err(Error::Unauthorized);
+        }
+        current_admin.require_auth();
+        storage::set_pending_admin(&env, &new_admin);
+        Ok(())
+    }
+
+    /// Issue #380: Accept admin ownership (Step 2).
+    /// Finalizes the transfer of admin ownership.
+    pub fn accept_admin(env: Env, new_admin: Address) -> Result<(), Error> {
+        let pending = storage::get_pending_admin(&env).ok_or(Error::Unauthorized)?;
+        if new_admin != pending {
+            return Err(Error::Unauthorized);
+        }
+        new_admin.require_auth();
+        
+        let previous_admin = storage::get_admin(&env).ok_or(Error::NotInit)?;
+        storage::set_admin(&env, &new_admin);
+        storage::clear_pending_admin(&env);
+        
+        events::admin_transferred(&env, &previous_admin, &new_admin);
+        Ok(())
+    }
+
     /// Issue #122: Set the fee recipient address for platform fees.
     /// Only the admin can update the fee recipient.
     /// Emits a fee_recipient_updated event for audit trails.
diff --git a/contracts/payment-distributor/src/storage.rs b/contracts/payment-distributor/src/storage.rs
index a3875a0..8e9088b 100644
--- a/contracts/payment-distributor/src/storage.rs
+++ b/contracts/payment-distributor/src/storage.rs
@@ -28,6 +28,18 @@ pub fn get_admin(env: &Env) -> Option<Address> {
     env.storage().instance().get(&StorageKey::Admin)
 }
 
+pub fn set_pending_admin(env: &Env, admin: &Address) {
+    env.storage().instance().set(&StorageKey::PendingAdmin, admin);
+}
+
+pub fn get_pending_admin(env: &Env) -> Option<Address> {
+    env.storage().instance().get(&StorageKey::PendingAdmin)
+}
+
+pub fn clear_pending_admin(env: &Env) {
+    env.storage().instance().remove(&StorageKey::PendingAdmin);
+}
+
 pub fn set_fee_recipient(env: &Env, fee_recipient: &Address) {
     env.storage()
         .instance()
diff --git a/contracts/payment-distributor/src/test.rs b/contracts/payment-distributor/src/test.rs
index 452d5d5..8bcde77 100644
--- a/contracts/payment-distributor/src/test.rs
+++ b/contracts/payment-distributor/src/test.rs
@@ -4923,8 +4923,79 @@ fn acceptance_criteria_no_unexpected_dust_after_completed_distribution() {
     let distributor = ctx.payment_token.balance(&ctx.distributor_id);
     let escrow = ctx.payment_token.balance(&ctx.escrow_id);
 
-    // No dust in distributor
+// No dust in distributor
     assert_eq!(distributor, 0);
     // All escrowed funds distributed or reserved
     assert_eq!(escrow, 0);
 }
+
+// ──────────────────────────────────────────────────────────────────────────────
+// ADMIN TRANSFER TWO-STEP PROCESS TESTS
+// ──────────────────────────────────────────────────────────────────────────────
+
+#[test]
+fn test_successful_two_step_admin_transfer() {
+    let env = Env::default();
+    env.mock_all_auths();
+    
+    let ctx = setup(&env, 0, false);
+    let new_admin = Address::generate(&env);
+    
+    // Step 1: transfer_admin
+    ctx.distributor.transfer_admin(&ctx.admin, &new_admin);
+    
+    // Step 2: accept_admin
+    ctx.distributor.accept_admin(&new_admin);
+    
+    assert_eq!(ctx.distributor.get_admin(), new_admin);
+}
+
+#[test]
+#[should_panic(expected = "Error(Contract, #4)")]
+fn test_unauthorized_caller_on_transfer_admin() {
+    let env = Env::default();
+    env.mock_all_auths();
+    
+    let ctx = setup(&env, 0, false);
+    let unauthorized = Address::generate(&env);
+    let new_admin = Address::generate(&env);
+    
+    // Fails with Unauthorized
+    ctx.distributor.transfer_admin(&unauthorized, &new_admin);
+}
+
+#[test]
+#[should_panic(expected = "Error(Contract, #4)")]
+fn test_unauthorized_caller_on_accept_admin() {
+    let env = Env::default();
+    env.mock_all_auths();
+    
+    let ctx = setup(&env, 0, false);
+    let new_admin = Address::generate(&env);
+    let unauthorized = Address::generate(&env);
+    
+    ctx.distributor.transfer_admin(&ctx.admin, &new_admin);
+    
+    // Fails with Unauthorized (wrong caller)
+    ctx.distributor.accept_admin(&unauthorized);
+}
+
+#[test]
+fn test_chained_transfers_and_event_log_emission() {
+    let env = Env::default();
+    env.mock_all_auths();
+    
+    let ctx = setup(&env, 0, false);
+    let admin_1 = Address::generate(&env);
+    let admin_2 = Address::generate(&env);
+    
+    // Transfer 1
+    ctx.distributor.transfer_admin(&ctx.admin, &admin_1);
+    ctx.distributor.accept_admin(&admin_1);
+    assert_eq!(ctx.distributor.get_admin(), admin_1);
+    
+    // Transfer 2
+    ctx.distributor.transfer_admin(&admin_1, &admin_2);
+    ctx.distributor.accept_admin(&admin_2);
+    assert_eq!(ctx.distributor.get_admin(), admin_2);
+}
diff --git a/contracts/payment-distributor/src/types.rs b/contracts/payment-distributor/src/types.rs
index efa4e16..ff43a3f 100644
--- a/contracts/payment-distributor/src/types.rs
+++ b/contracts/payment-distributor/src/types.rs
@@ -6,6 +6,7 @@ use crate::errors::Error;
 #[derive(Clone, Debug, Eq, PartialEq)]
 pub enum StorageKey {
     Admin,
+    PendingAdmin,
     Distribution(soroban_sdk::Address, soroban_sdk::Symbol),
     /// Ordered platform fee tiers.
     FeeTiers,