Four Things Restaurants, Bars, and Hotels Need To Know About Dram Shop Law

Originally published by emma.h.

There are many businesses that can fall within the classification of a “dram shop.” Dram shop is a term used to describe any establishment where alcohol is sold and consumed, including bars, nightclubs, and restaurants. Businesses can face a variety of liabilities when the distribution of alcohol is involved. Because of this, Texas dram shop laws are in place to protect against the overselling of alcohol. Here are four aspects of Texas dram shop law about which business owners should be aware.

1. Texas Dram Shop Act is the Exclusive Remedy

The Texas Legislature originally enacted the Texas Dram Shop Act to protect against involvement of the criminal element in alcoholic beverage trafficking. The Act is also the exclusive remedy for civil liabilities for providers of alcoholic beverages for the actions of their employees, customers, members, or guests who are or become intoxicated.

Establishing civil liability against a provider of alcoholic beverages requires proof that at the time a person was sold, served, or provided alcohol, he was obviously intoxicated to the extent that he presented a clear danger to himself and others; and the intoxication of the recipient of the alcoholic beverage was a proximate cause of the damages suffered.

2. The Safe Harbor Defense Offers Protection for Establishments

The Texas Dram Shop Act offers protection to establishments for the acts of its employees in what is know as the Safe Harbor Defense. To be shielded from liability under the Safe Harbor Defense, the following three criteria must be met: 1) the employer requires its employees to attend a Texas Alcoholic Beverage Commission (TABC) approved seller training program; 2) the employee has actually attended such a training; and 3) the employer has not directly or indirectly encouraged the employee to violate such law.

To protect itself from civil liabilities relating to over-serving, establishments should require all of its employees to attend a TABC-approved seller training class.

3. Repercussions for Selling to Minors and Liquor Liability

Although at 18 a person technically becomes an adult, the legal drinking age in Texas is 21. As such, under the Texas Dram Shop Act, a “minor” is defined as anyone under the age of 21. Selling alcohol to a minor subjects the seller to liability unless the minor presents an apparently valid identification that falsely represents the minor to be 21 years of age or older. All establishments should have policies and procedures in place to safeguard against selling or serving alcohol to minors.

4. The Actions of the Drunk

Under Texas law, a jury can consider the actions of the intoxicated person in determining liability. In any civil case, the establishment should add the intoxicated person to the lawsuit either as a defendant or a responsible third-party. It will then be up to the fact-finder to determine percentages of liability for damages and/or injuries caused as a result of the drunk person’s actions.

Texas Hospitality Attorneys

The Texas hospitality lawyers at MehaffyWeber understand the difficulties of running a service industry business and have the legal knowledge to help when needed. Contact us today to schedule an appointment with one of our experienced Texas hospitality lawyers.

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Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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