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 New York, the Dram Shop Law is codified under the Alcoholic Beverage Control Law, specifically in sections 65(2) and 65-a. These provisions prohibit the sale of alcohol to any visibly intoxicated person or to anyone known to be a habitual drunkard. New York's Dram Shop Law allows for civil liability in cases where an establishment unlawfully sells or provides alcohol to a person who is visibly intoxicated, and that person subsequently causes injury or damage to third parties as a result of their intoxication. This means that bars, restaurants, liquor stores, and other licensed establishments can be held legally responsible if they serve alcohol to someone who is clearly intoxicated, and that person goes on to harm someone else or damage property. The law is intended to encourage responsible serving practices and to provide a means of recourse for victims of incidents involving intoxicated individuals.