Joint and several is a legal principle where two or more parties are each responsible for an entire obligation, individually and collectively. A creditor can pursue any one debtor for the full amount owed, or all debtors jointly. This arrangement provides greater security for the obligee.
Context
The principle of joint and several liability has significant implications for participants in certain decentralized organizations or multi-signature arrangements within the digital asset sector. If such entities are deemed partnerships, individual members could face full personal liability for the organization’s financial commitments or legal transgressions. This legal concept presents a substantial risk, particularly in the absence of clear corporate structuring for decentralized autonomous organizations.
The judicial classification of a DAO as a general partnership fundamentally re-architects DeFi legal risk, imposing joint and several liability on participants.
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