What are "Dram Shop Laws"?

“Dram shop laws,” otherwise known as liquor liability laws, are designed to hold bars, taverns, restaurants, and other alcohol-serving establishments responsible for over-serving or serving alcohol to minors. In other words, if you are injured because someone drank to excess at a bar or restaurant, dram shop laws allow you to sue both the negligent person and the establishment that sold the liquor.

“Dram shop laws” got their name from Colonial-Era drinking establishments, where alcohol was served by the dram, a unit of liquid measure at the time.

The key to suing under dram shop laws is establishing that the bartender or server sold alcohol to someone who was already “visibly intoxicated.” New Jersey law defines visible intoxication as “a state of intoxication accompanied by a perceptible act or series of acts which present clear signs of intoxication.” Sellers of alcoholic beverages are required by law to cut off a person who appears visibly intoxicated; failure to do so can leave the bar, hotel, catering hall, or other establishment liable if the person causes an injury to someone else.

However, suing under dram shop laws is not always easy. The vast majority of alcohol-serving establishments will try to claim it was the patron’s personal responsibility to monitor their own drinking and prevent themselves from getting into trouble. The Dram Shop Act states that someone who is injured as a result of negligent service can only recover damages if:

  • The server is deemed negligent
  • The negligent service of alcoholic beverages was the proximate cause of the injury or damage
  • The injury or damage was a foreseeable consequence of the negligent service

Dram shop laws can apply to a number of different situations, including:

Driving under the influence: If a bartender serves more alcohol to a visibly intoxicated person, who then gets behind the wheel and gets into a car accident, the bar or restaurant could be held liable for the injuries or damage the drunk driver caused.

When it comes to driving under the influence, it is important to note that dram shop laws do not apply only to bars and restaurants. A social host throwing a private party can be held liable for injuries or damage caused by overconsumption at his or her party. Social hosts can—and have been—found liable for third-party injuries by an intoxicated guest, such as when a drunk person drives home and gets into a car accident. Dram shop laws can apply to private holiday parties, office parties, and any other social gathering with alcohol present.

Consumption of alcohol by a minor: Dram shop laws are more severe (and punish establishments more harshly) when minors are involved. In the state of new Jersey, a minor can sue an alcohol-serving establishment for his or her own injuries sustained while intoxicated. In other words, if a minor is served in a bar, then he drunkenly falls down the stairs and breaks several bones, he could sue the bar under dram shop laws. This is different from the typical application of dram shop laws because it involves first-party injuries (i.e. injuries to the drunk person) rather than third party injuries (i.e. injuries caused by the drunk person). Dram shop laws that apply to minors are designed to enhance underage drinking laws and cause bars to be more diligent about checking IDs and refusing to serve underage patrons.