Happy supports a limited form of error recovery, using the special symbol error in a grammar file. When Happy finds a parse error during parsing, it automatically inserts the error symbol; if your grammar deals with error explicitly, then it can detect the error and carry on.

For example, the Happy grammar for Haskell uses error recovery to implement Haskell layout. The grammar has a rule that looks like this:

close : '}'                  { () }
      | error		     { () }

This says that a close brace in a layout-indented context may be either a curly brace (inserted by the lexical analyser), or a parse error.

This rule is used to parse expressions like let x = e in e': the layout system inserts an open brace before x, and the occurrence of the in symbol generates a parse error, which is interpreted as a close brace by the above rule.

Note for yacc users: this form of error recovery is strictly more limited than that provided by yacc. During a parse error condition, yacc attempts to discard states and tokens in order to get back into a state where parsing may continue; Happy doesn't do this. The reason is that normal yacc error recovery is notoriously hard to describe, and the semantics depend heavily on the workings of a shift-reduce parser. Furthermore, different implementations of yacc appear to implement error recovery differently. Happy's limited error recovery on the other hand is well-defined, as is just sufficient to implement the Haskell layout rule (which is why it was added in the first place).