The legal responsibility for DeFi liquidation errors caused by model bias in ORA’s AI oracle hinges on contractual and tort law. ORA, as an on-chain AI oracle, may face liability for breach of contract if its biased model fails to deliver accurate data, violating service agreements. Negligence claims could arise if ORA neglects to mitigate known biases, causing foreseeable harm. However, DeFi’s decentralized nature complicates accountability, as smart contracts execute automatically. Users may bear some responsibility for relying on ORA without due diligence. Regulatory gaps in AI and DeFi further blur liability lines. Clear contractual terms, transparent model audits, and user risk disclosures are critical to defining and limiting ORA’s legal exposure in such cases.