Free Enterprise - The FindLaw Small Business Law Blog

Teen DUI Settlement Highlights Dram Shop Liability

A recent settlement between the Sonoma County winery called Paradise Ridge Winery and a teenage boy over a teen DUI brought attention to dram shop liability. We wrote about the case settlement in more detail in our Injured Blog.  

Even though California does not have per se dram shop laws, this lawsuit dealt with a teen DU,I which is an exception to this rule. This brings up some important questions:

What is dram shop liability for vendors?

The first thing that you need to figure out is what a dram shop is. A dram shop is the legal term for any place where alcoholic beverages are sold.

So if your small business sells any alcoholic beverages, you can be open to dram shop liability for vendors. Dram shop liability is basically any liability that comes out of selling alcohol to obviously intoxicated individuals or minors that results in personal injury or wrongful death.

Some states impose liability in either scenario -- selling to minors, or to overly intoxicated adults -- while other punish one more than the other. You can look at a useful chart that lists out dram shop liability by state here. Some of the major states that have both types of liabilities are: Connecticut, Illinois, Massachusetts, and New York. California only has vendor liability for minors, not adults. 

What is dram shop liability for social/business hosts?

Now that you know what dram shop liability is for vendors, it is important to understand more about dram shop liability for social/business hosts.

We did a post in Free Enterprise previously about holiday office parties. Did you know that your small business could be on the hook for any accidents that occur from an intoxicated guest at your holiday party -- even off-site?

It would fall under social host liability (or business host liability). Under social/business host liability laws, adults who serve or provide alcohol to minors or persons who are obviously intoxicated can be held liable if the person who was provided alcohol is killed or injured, or kills or injures another person.

Some states that have social/business host liability for both adults and minors are: Indiana, New Hampshire, New Mexico, and Vermont. California has no social host liability. New York only has social host liability for furnishing alcohol to minors.

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