What is Dram Shop Laws

Dram shop laws are laws that hold businesses liable when they serve or sell alcohol to minors or obviously intoxicated persons who later cause death or injury. Dram shop laws vary by state. States hold establishments liable in certain circumstances, and to varying degrees, depending on the law approved by the voters of the state.

BREAKING DOWN Dram Shop Laws

The dram shop law gets its name from a historical way of measuring alcohol where a dram is .75 of a teaspoon. The regulation applies to all businesses that sell or serve alcohol. Such establishments include restaurants, bars, liquor stores, taverns, and stadium vendors.

Dram shop laws enable third-party victims of drunken behavior to file civil lawsuits against the establishment, the wait staff, or the store clerk that sold alcohol to the minor or intoxicated person. Victims may also bring suit against the intoxicated individual and possibly receive damages from both parties.

In a third-party dram shop case, the victim of the intoxicated customer may sue the establishment that excessively served the customer. Liability verdicts look at common negligence laws, reckless behavior, and intentional misconduct. 

Dram shop laws also allow the drinker to bring suit against a business that sold them alcohol in first-party litigation. In a first-party dram shop case, if the intoxicated customer sustains injury resulting from their drunkenness they may sue the business, server, or store clerk for overserving them. Many states prohibit such claims by people of legal drinking age.

Dram Shop Liability

The challenge for third-party victims is proving liability. Bartenders may be unable to ascertain a patron’s level of intoxication and may not know if they will operate a vehicle. State law provides a series of items that the victim (plaintiff) must prove. These include proof that the establishment sold alcohol to the obviously intoxicated person (defendant) who caused the accident and evidence that the establishment’s alcohol sale resulted in the defendant’s intoxication.

Businesses should train employees how to identify, and not serve or sell alcohol to, obviously intoxicated individuals or to minors. Examples of intoxication include slow or slurred speech, bloodshot eyes, loss of balance or coordination, and exhibiting obnoxious, aggressive, or emotional behavior. State law may require establishments post notice stating they do not sell to obviously intoxicated patrons.

Proponents of dram shop laws cite proof these laws reduce alcohol-related crashes. Mothers Against Drunk Driving (MADD) cites the statutes for an increase in public awareness of the effects of overserving alcohol and a decrease in excessive and illegal alcohol consumption.  The goal is to give establishments that serve and sell alcohol an incentive to do so responsibly and to thoroughly verify that clients are of legal drinking age. Prior to dram shop laws, alcoholic beverage sellers were not legally responsible for a plaintiff’s injuries.

Similar to dram shop laws are social host liability laws. The host of a private function where alcohol is served or sold may be at fault for injuries or death caused by a minor or an obviously intoxicated person to whom they were the host. The social host law is especially crucial around university and college campuses.