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 furnished to a minor under the age of 21. This is a significant departure from the dram shop laws of many other states, where establishments can be held liable for serving alcohol to obviously intoxicated individuals who subsequently cause harm to others. California's Civil Code Section 1714 further reinforces this by stating that the consumption of alcoholic beverages, rather than the serving of alcohol, is the proximate cause of injuries inflicted by an intoxicated person. Therefore, in California, the liability of servers, liquor stores, bars, and restaurants for the actions of their intoxicated patrons is largely absolved, unless the patron is underage.