Dram Shop Law

Dram Shop Law Customer drinks hard liquor at bar.

Usually when you think of the term “dram” what usually comes to mind for you? Dram shops were originally designed as shops that carried spirits sold “by the dram”, meaning they were sold by a small amount. In a sense, it’s a very old-fashioned way of saying a bar or a pub.

There is a lot of information to know before opening up a dram shop. This is where liability would come in, considering minors and intoxicated people will most likely walk in. Furthermore, with that being said, let’s dive more into the definition of a dram shop, shall we? 

Is the Dram Shop Law in Every State?

One would assume that dram shops are available nationwide. But, the downside of having a dram shop is that certain laws in certain states limit who serves alcohol to. 22 states carry dram shop laws including Alaska, California, Michigan, and Texas. These states usually limit their liability in cases where alcohol can be served to someone who is intoxicated or under 21. As for the other 33 states, there are statutory regulations that allow restaurants. liquor stores and taverns to be held liable for distributing alcohol (ncsl.org). 

Bar and restaurant owners should be highly aware that they can be sued for the involvement of their dram shops. For instance, if a patron was intoxicated by alcohol they bought from your dram shop and caused a car accident, then your business is automatically at fault. Typically these establishments would be liable for people who may harm others while under the influence. Hence, the different laws within each state. 

Dram Shop Law Misconception

A misconception about dram shops, however, is that most cases can be based on recklessness. To succeed in the dram shop business, plaintiffs typically need to show evidence that they served alcohol despite being aware of the visible intoxication of an individual. All in all, dram shops carry the reputation of being controversial. Many people fear dram shops don’t hold enough people accountable for their actions, which plays a big part in why certain states have dram shop laws and other states do not. This can be seen as a tricky process that dram shops tiptoe around, but that’s one of the overall misconceptions that can lead to the notoriety of dram shops. 

Depending on which state you live in, it's best to research what you're getting yourself into when it comes to opening up a dram shop. However, don't let this discourage you from ever opening up one. In this case, dram shops will still be liable in one way or another. Overall, it's insightful to hear about what the do's and don'ts are before starting the process. 

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