Dram Shop Laws

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 What Are Liquor Licenses?

Liquor laws are what govern the sale and consumption of alcoholic beverages. Each state has its own liquor laws, and as such, liquor laws may even differ from region to region within the same state. An example of this would be how the sale of alcohol in business zones is highly regulated. Additionally, the sale of alcohol may be prohibited on Sundays or during certain times of the day in specific states.

Generally speaking, liquor laws govern the following:

  • Who can sell alcoholic beverages;
  • Who can buy alcoholic beverages;
  • Where liquor can be sold, and at what times it may be sold;
  • Drinking and driving or DUI laws, as well as other crimes such as open container laws;
  • Issuing liquor licenses, as well as licenses to serve alcohol; and
  • Alcohol consumption at bars and other alcohol-centered venues.

A liquor license is a specific document that allows a business to sell or serve alcoholic beverages in the state in which they are located. Liquor laws are strictly regulated by the federal government, state government, and local governments, as was previously mentioned. These licenses include permissions regarding:

  • The cost of beverages;
  • Where alcohol can be sold;
  • How much alcohol can be sold;
  • Who can buy alcohol; and
  • When alcohol can be served.

The process of obtaining a liquor license is considerably extensive and time-consuming, in an effort to reduce fraud. The application itself can also be expensive, depending on where you are opening your business. Additionally, towns and cities will frequently limit the number of establishments that are able to use these licenses at one time, which is referred to as a quota.

The first step in applying for a liquor license would be submitting your request to your city’s government. This will generally be reviewed in a meeting that is open to the public, and citizens who attend this town meeting have the right to their opinions of the application. They will discuss it with the town council.

Once the local government approves of the application, it is submitted to the state for its review. Ultimately, if the state government approves the application, a liquor license will be awarded to your restaurant or business. However, not every application for a business license is approved, which is especially true for liquor licenses because the laws governing alcohol are rigorous. To reiterate, if a jurisdiction has met a quota for businesses that can sell alcohol, it can be rejected.

Additionally, several local and state officials review each application; as such, if one element is out of place, there could be a negative impact. An example of this would be how if a business has records of overdue taxes or fees, it is less likely that they will be able to obtain a license; or, the process of being awarded a liquor license would be considerably delayed.

Are There Different Types Of Liquor Licenses?

Because each state has its own liquor laws, every state requires a different license. However, there are areas in which a standard “liquor license” is accepted. This can encompass all types of alcohol sales that are specific to that state. More commonly, a license will distinguish whether a business can sell alcohol that is to be consumed on the premises, or off the premises.

To reiterate, cities can often separate liquor from other alcohol sales. An example of this would be how if a restaurant only serves beer and wine, they may need a specific Beer and Wine License, as opposed to an actual liquor license. Other states require a specific category of liquor licenses, depending on the nature of the business. An example of this would be how clubs, hotels, and restaurants may have a particular category of licenses, as well as companies that deliver alcohol.

Liquor licenses are commonly referred to when speaking about the operations of bars and restaurants. Retail stores that sell alcohol such as liquor stores, supermarkets, and convenience stores are also subjected to liquor licenses; more specifically, a Retail License.

What Are Dram Shop Laws?

Dram shop is a term for laws that hold retail establishments liable for damages caused by serving alcohol to an obviously intoxicated patron, including alcohol served to minors. These laws may sometimes also apply to social hosts.

Dram shop laws are intended to place responsibility on those who profit from the distribution of alcohol. These laws also provide an incentive to owners of alcohol establishments to develop responsible service policies, as well as to properly train employees to refuse alcohol sales.

Each state varies in terms of who is liable when an intoxicated patron, guest, or minor causes injuries to themselves or to others. States that impose a dram shop law vary in terms of how they use and define terms, such as:

  • Intoxication;
  • Guest and/or patron;
  • Sales; and
  • Retailers.

One similarity among states that have adopted a dram shop law would be the application of the “obvious intoxication test.” What this means is that an employee or retailer knew or should have known that the patron was considerably intoxicated, so that more alcohol would cause danger to themselves or to others.

The following states have no dram shop liability:

What Happens If Liquor Laws Are Violated?

A liquor license comes with a list of regulations and laws that a business must adhere to. An example of this would be how once a business has acquired a liquor license, they must maintain and renew it regularly. Serving or selling alcohol without a valid license can result in the loss of the business, as well as jail time in especially serious circumstances. When renewing a liquor license, a business may need to pay additional fees.

Examples of violated liquor laws include:

  • Selling a type of alcohol that is not included in the license;
  • Selling alcohol to an underage person;
  • Bartenders over serving customers;
  • Allowing open containers to leave the premise; and
  • Allowing employees to drink excessively after their shift.

When a business violates the terms of the liquor license, they will receive an accusation, which is a formal document informing the business owner of the laws that they violated. Additionally, the owner is required to attend a hearing with the state’s alcohol controlling agent. A judge will then determine if the terms of the licenses were actually violated, and whether any disciplinary actions should be taken.

If a judge finds that a business has violated the terms of the license, they may impose a series of consequences on the business. The most common example of this would be revocation of a business’s liquor license, which can sometimes be permanent. It is common for a restaurant selling alcohol to anyone under the age of 21 to lose their license forever.

However, the business may have their license restored after they have met certain conditions. Additionally, fines and fees may be included, or may be the only disciplinary action that a judge imposes.

Mistakes in police procedure can sometimes serve as a defense to liquor law violations. However, some liquor law violations are strict liability violations, meaning that the person might be held liable simply for the action. This would be regardless of their knowledge or intentions at the time. An example of this would be the sale of alcohol to minors, which can be punished even when the shop owner did not know that the person was a minor.

Do I Need A Lawyer For Help With Dram Shop Laws?

Regardless of whether an owner has liability insurance, a business attorney in your state can help determine if you were involved in a dram shop violation. An experienced attorney will help you understand your legal rights and options according to your state’s specific laws, and will also be able to represent you in court, as needed.

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