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Dram Shop Rule

Definition - What does Dram Shop Rule mean?

The dram shop rule refers to the statute or case law that allows any establishment that is licensed to serve alcohol to be held liable when a person whom they have supplied with alcohol injures someone else. Thirty U.S. states enforce this law, but 22 of those 30 limit the liability to only those cases in which the establishment served alcohol to either an obviously intoxicated individual or someone who was underage.

Justipedia explains Dram Shop Rule

The term dram shop is used in legal parlance in the United States to refer to any establishment that serves alcohol. Dram shop rules vary from state to state, but all 50 states have made it illegal to serve alcohol to underage patrons. Most states allow a victim (which may include the drinker him/herself) to recover damages when the establishment was aware that the drinker was intoxicated and yet continued to serve him/her.

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