Dram Shop Law: Liability and the Alcohol Seller

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By Laura Strachan, Esq. on September 10, 2010 11:59 AM

Vendors, bars, and social hosts beware: your liability may not end when topping off a guest or patron's cup with alcohol or closing out their tab. Dram shop laws, which essentially hold an alcohol seller accountable for injuries an intoxicated patron causes after consuming alcohol, are becoming more common for states to enforce. The laws, which can vary greatly in scope depending on the state, create an actionable cause for a victim of a drinking-related accident against more than just the that person directly caused the injury.

The purpose behind a given state's Dram Shop Law is simple -- to discourage a vendor from continuing to serve alcohol to a person that is clearly past their legal limit. Since the bartender has the choice to stop or continue serving the patron, he or she should be held liable when they ignore the signs of heavy intoxication that later cause major death or injury to another.

Two states with fairly established laws on the subject are Texas and Illinois. In Texas, the law places liability on those individuals and establishments that "serve and sell alcohol to a person who is obviously intoxicated to the extent that he presented a clear danger to himself and others." Bars and restaurants can get very busy with customers, and it may be hard to keep track of every drink a person has consumed. As the Texas Dram Shop Act definition implies, the level of intoxication should be fairly obvious, such that continuing to serve the patron is a serious lapse in judgment, as well as a conscious decision.

Illinois Dram Shop Act highlights an issue with the many of the state laws -- in order to apply, it is the place of the accident, and not the place of the bar tab that rules. So, if the accident does not occur in the state that the alcohol is sold, the injured party will have a much harder (if not impossible time) recovering under any type of dram shop law.

In addition to holding bars and vendors liable, many states also include provisions for social hosts that furnish alcohol to minors at a party. The rationale and the liability is essentially the same in both scenarios. The bottom line is that a state dram shop law recognizes that there are multiple factors at play in a drunk driving accident. Although the bulk of the liability typically rests on the intoxicated individual, victims of drinking-related offenses have more than one option of recovery in most cases.

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