2-Minute Law School: Dram Shop Laws

Hi. Professor Albert here for this week’s edition of THELAW.TV’s 2-Minute Law School. This week, we’re going to talk about liquor liability laws, which are often called dram shop laws.

Everyone knows that driving under the influence of drugs or alcohol is a serious offense that can lead to criminal and civil penalties. But, what you may not know is that it’s sometimes not just the impaired driver who is responsible for the crash.

Dram shop is a legal term in the United States referring to a bar, tavern, or anyplace where alcoholic beverages are sold. Dram shop liability refers to the body of law governing the liability of taverns, liquor stores, and other commercial establishments that serve alcoholic beverages. Generally, dram shop laws establish the liability of businesses arising out of the sale of alcohol to visibly intoxicated persons or minors who subsequently cause death or injury to third-parties as a result of alcohol-related car crashes and other accidents.

But, dram shop laws have often been enforced against individual or businesses who are not bars or taverns, but who served alcohol to someone who later caused an accident.

That’s important to remember during the holiday season.

Like many companies across the country, yours may be planning a holiday party this month. And, most likely, your employer will be providing alcohol. Doing so might not be such a good idea for your boss. Many companies don’t realize that they can be liable for injuries caused by employees who drive drunk after an office party or another company-sponsored event. Even companies that know the risk exists don’t fully understand the exact nature of their potential liability and how to manage it.

What’s worse, while bars typically have insurance to protect themselves from these types of situations, the liability policies of most other businesses will generally not cover a dram shop case, which could result in a costly judgment against the business.

Here’s a couple more thing you should know about dram shop laws.

You know that serving alcohol to minors is illegal in all fifty states. But, dram shop laws vary from state-to-state. Many states impose liability on bars for serving minors who subsequently injure themselves or others, which deters minors from being served alcohol. As a result, in states like Texas and New Jersey, minors can sue a drinking establishment for their own injuries sustained while intoxicated. In other states, dram shop liability only extends to serving the habitually intoxicated. The majority of states allow for recovery when the defendant knew, or should have known, that the customer was intoxicated. Some states have attempted to address this problem through more exacting tests. Missouri’s recently revised dram shop law requires proof that the party demonstrates “significantly uncoordinated physical action or significant physical dysfunction.” In Texas, a patron must be so obviously intoxicated that he presents a clear danger to himself and others.

If you have questions about liquor liability law, watch hundreds of local attorneys answer thousands of legal questions on video, or consult with one of the featured lawyers. Online at THELAW.TV.

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