Alcohol Server · Alcohol Laws and Regulations

What is 'dram shop' liability?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

Laws under which an establishment can be held liable for harm caused by a customer it served unlawfully (such as an intoxicated person who then injures someone)

A A rule about drink sizes
B Laws under which an establishment can be held liable for harm caused by a customer it served unlawfully (such as an intoxicated person who then injures someone)
C A tax on alcohol sales
D A type of liquor license

Why this is the answer

Dram shop liability refers to laws in many states under which an alcohol-serving establishment (and sometimes the individual server) can be held legally responsible for damages caused by a customer who was served unlawfully — for example, serving an obviously intoxicated patron who then causes a car crash and injures someone. The specifics vary by state. Dram shop laws are a major reason responsible service matters: they create direct financial and legal consequences for over-serving. Understanding this concept underscores the server's role in preventing harm.

Source: Responsible Beverage Service — Dram Shop Liability

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About this topic: Alcohol Laws and Regulations

Seller-server law questions cover the minimum drinking age, hours of sale, dram-shop liability, penalties for selling to minors or intoxicated persons, and the difference between administrative and criminal consequences. The numbers vary by state, so check your state's rules alongside these. This is one of 12 Seller-Server questions on alcohol laws and regulations, each with a full explanation on a single study page.

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What is 'dram shop' liability?

Why this is the answer

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About this topic: Alcohol Laws and Regulations

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