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 Jersey, dram shop laws are codified under the New Jersey Statutes Annotated (NJSA) 2A:22A-1 to 2A:22A-7, known as the 'New Jersey Licensed Alcoholic Beverage Server Fair Liability Act.' These laws allow for a person to bring a civil action against a licensed alcoholic beverage server if the server negligently served alcohol to a visibly intoxicated individual or to a minor, and that service was a proximate cause of injury, death, or property damage. The key element in these cases is that the individual served must have been 'visibly intoxicated' at the time they were served, or the server must have known or reasonably should have known that the person was a minor. New Jersey's dram shop laws are intended to provide a balance between holding servers responsible for their actions and recognizing the responsibilities of individuals who consume alcoholic beverages.