Can a DAO be sued or bring a lawsuit in a court of law?

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  • Germany


A DAO can sue and can be sued if it can be party to a civil proceeding. This requires that the DAO can be subject to civil law obligations and exercise civil law rights. This is the case when the DAO qualifies as a legal entity under civil law. Whether a DAO qualifies as a legal entity depends on the circumstances of the single case, in particular on the structure of the DAO and the relationship between its members. In current legal practice, DAOs may basically qualify as a civil law partnership (Gesellschaft bürgerlichen Rechts – GbR) or as a general partnership (offene Handelsgesellschaft-OHG). 
According to a certain opinion, a DAO may qualify as an unincorporated association (nicht rechtsfähiger Verein) as well. Even though such associations are not regarded as legal entities, they can nevertheless be subject to procedural rights. As an exemption from the
general rule, this is explicitly set out in the Code of Civil Procedure (Zivilprozessordnung-
ZPO). Therefore, if a DAO qualifies as an unincorporated association, it can sue and can be sued regardless of any further aspects. 

The DAO must be represented in court by its legal representative (gesetzlicher Vertreter). The legal representative can give another person a power of attorney, e. g. a legal firm or an
attorney in law.

Zsofia Vig

Banking and Capital Markets Law (DeFi/Web3, Crypto in general, tokenized Securities)

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