Most states have a dram shop law to deter providers of alcoholic beverages (servers, liquor stores, bars, restaurants) who sell or serve alcoholic beverages under authority of a license or permit from selling or serving alcoholic beverages to obviously intoxicated individuals.

These laws generally eliminate any liability of servers, liquor stores, bars, and restaurants when a person to whom they sell or serve alcohol causes personal injury or property damage—whether in an automobile accident, a fight, or other incident—unless the person to whom they sell or serve alcohol is obviously intoxicated.

Laws regarding dram shop liability vary from state to state and are usually located in a state’s statutes.

In California, the state's dram shop laws are quite limited compared to other states. Under California Business and Professions Code Section 25602, a licensed individual or establishment that sells alcohol cannot be held liable for damages caused by intoxicated patrons, except in cases where alcohol is sold or provided to a person who is obviously intoxicated and is a minor under the age of 21. This means that bars, restaurants, and liquor stores are generally not liable for injuries or damages caused by their adult customers after they leave the premises. However, social hosts who provide alcohol at parties can be held liable if they serve alcohol to a minor who then causes injury or damage. California's approach reflects a public policy decision that the responsibility for damages caused by intoxication rests primarily on the drinker, not the provider of alcoholic beverages.