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 Delaware, dram shop laws are codified under Title 4, Section 904 of the Delaware Code. These laws impose liability on alcohol vendors, such as bars, restaurants, and liquor stores, for damages caused by individuals to whom they have unlawfully sold or served alcohol. Specifically, Delaware's dram shop statute allows for a cause of action against an alcohol vendor if they sell or serve alcohol to a person who is visibly intoxicated, or under the legal drinking age, and that person subsequently causes injury or damage as a result of their intoxication. The intent of these laws is to encourage responsible serving and selling practices among licensed establishments to reduce alcohol-related harm. It is important for vendors to be aware of these regulations to avoid potential liability for the actions of intoxicated patrons.