1) You do not reset the processor if you get a transfer error. You write your code so it just resets the state variables and stays silent until receiving a new transfer request. I have already told you what the slave should do if it doesn't get an acknowledge for a byte.

2) In a situation where you really do need to reset a processor, you activate the external reset line, or use any internal watchdog or whatever support your specific processor has. But only a real reset will reset all state of the processor, so only a real reset will have a chance of repairing the state of a processor that have got really stuck.