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 South Dakota, dram shop laws are codified under SDCL 35-4-78, which allows for a cause of action against any licensee who sells or serves alcohol to any person who is obviously intoxicated, or against any licensee or social host who provides alcohol to a person under the age of 21, if the consumption of alcohol is a proximate cause of injury, death, or property damage. This means that bars, restaurants, liquor stores, and other establishments that serve or sell alcohol can be held liable if they serve an obviously intoxicated person or a minor, and that person goes on to cause harm to themselves or others. It is important for establishments that serve alcohol to be vigilant in monitoring the intoxication levels of their patrons to avoid potential liability under South Dakota's dram shop laws.