Dram Shop Rule

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A dram shop rule (dram shop law or dram shop act) is a civil liability statute that renders a dram shop liable for the harmful acts of its intoxicated customers when the establishment acts negligently in serving the intoxicated customer alcohol, and the customer then causes harm (usually to a third-party victim) as a result of his/her intoxication (examples include drunk driving accidents and bar fights). While most jurisdictions limit liability to only cover harm to third parties, some, such as Pennsylvania (Schelin v. Goldberg), extend this liability to cover first-party harm, giving a patron a cause of action against the establishment for any injuries the individual may have sustained as a result of his/her own intoxication.

A dram shop is a commercial establishment that sells alcoholic beverages (examples include bars, taverns, and restaurants). While most jurisdictions limit dram shop liability to commercial establishments, some jurisdictions (such as Maine) extend liability to social hosts.

Dram shop laws in most jurisdictions establish liability on a negligence (i.e., not strict liability) basis, for serving alcohol to a patron whom the server knows or reasonably should know is intoxicated, or for serving alcohol to someone under the legal drinking age.

[Last updated in June of 2021 by the Wex Definitions Team]