What is a Dram Shop?

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  • Written By: Felicia Dye
  • Edited By: C. Wilborn
  • Last Modified Date: 21 January 2020
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Dram shop is a legal term in the United States referring to a place that sells alcohol. This could include a bar, a restaurant, or a liquor store. There are special laws, called dram shop laws, which impose certain liability for damages on vendors of alcohol. Although they are not considered alcohol establishments, dram laws can affect anyone who profits from alcohol, such as caterers and vendors at concession stands.

The term is derived from old English. At one time, alcohol was sold in small units known as a dram. This term was later used in the United States to refer to those establishments that sell alcohol in any measurement. This includes establishments that sell alcohol that will be consumed on the premises and those that sell alcohol that will be taken away.

The laws regarding dram shops are generally put into place to ensure that those who profit from alcohol do not do so at the expense of public safety. A dram shop can, therefore, be held responsible when an intoxicated person causes harm. This includes damaging property and injuring or killing a living creature.


It is common to find a great deal of emphasis placed on identifying intoxicated drivers. It is important to note, however, that a dram shop’s liability is not limited to the harm caused by intoxicated drivers. If a person becomes intoxicated and causes any type of harm to a third party including vandalism or battery, the dram shop could be held liable.

Those states that do recognize the liability of dram shops have varying versions of such laws. According to the laws in some states, a dram shop is only held liable when they have broken a law or regulation regarding the sale of alcohol. Some states, such as South Dakota, Maryland, and Nebraska, do not have dram laws.

For a dram shop to be held liable, in most instances, the circumstances are subjected to the "obvious intoxication test." This is a measure whereby it is determined if the vendor knew or should have known that a person was intoxicated to a point of being a potential danger.

The liability of a dram shop regarding damages also varies. In some states, these establishments are only liable for third party damages. In other states, an intoxicated person may also hold such a business responsible for damages that he causes to himself or to his own property.


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