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 Vermont, dram shop laws are codified under Vermont Statutes Title 7, Section 501, which holds that a person who furnishes alcohol to someone who is visibly intoxicated or under the legal drinking age may be held liable for damages caused by that individual's intoxication. This means that if a licensed establishment like a bar, restaurant, or liquor store sells or serves alcohol to an obviously intoxicated person, and that person subsequently causes injury or property damage, the establishment could be legally responsible. Vermont's dram shop law is intended to encourage responsible serving practices and to provide a means of recourse for those harmed by the actions of intoxicated individuals. It is important for establishments serving alcohol to be vigilant in monitoring the intoxication levels of their patrons to avoid potential liability under these laws.