Question: What is “dram shop” liability?
Answer: Liability that arises from serving alcohol to visibly intoxicated people.
The Dram Shop Act represents a legislative judgment that providers of alcoholic beverages should be liable for the reasonably foreseeable consequences of knowingly serving alcohol to visibly intoxicated persons. Dram Shop states that it is unlawful for a person to sell, barter, deliver, or give away an alcoholic beverage to another person who is in a state of intoxication if the person knows that the other person is intoxicated.
In order to be held civilly liable for violating Dram Shop, a person who furnishes an alcoholic beverage to an intoxicated person must have had actual knowledge that the person to whom the alcoholic beverage was furnished was visibly intoxicated at the time the alcoholic beverage was furnished. To ‘furnish’ an alcoholic beverage, a defendant must be found to have possessed or controlled the alcoholic beverages consumed. Also, the person’s intoxication must have been a proximate cause of the death, injury, or damage alleged in the civil complaint. In determining whether the furnisher of alcohol had actual knowledge that he was furnishing alcohol to an intoxicated individual, the furnisher’s knowledge must be judged by a subjective standard. Actual knowledge of intoxication can be inferred from indirect or circumstantial evidence.