Texas Legal Glossary · Personal Injury

Dram Shop Liability

Written and reviewed by Shane M. Boasberg, founder of SMB Law, PC · Licensed in Texas since 2003 · Updated October 2026

Definition: Dram shop liability is the Texas rule under Alcoholic Beverage Code § 2.02 that a bar, restaurant, or other licensed provider can be liable for injuries caused by a patron it served while that patron was obviously intoxicated and a clear danger to others.

Also called: Dram Shop Act, alcohol provider liability, Chapter 2 claim

What dram shop liability means in Texas

Dram shop liability is the name for a claim against a commercial seller of alcohol for the harm its intoxicated customer later causes. Texas codified the rule in Chapter 2 of the Alcoholic Beverage Code, commonly called the Dram Shop Act. Under § 2.02(b), a provider is liable if, at the time alcohol was provided, it was apparent to the provider that the person was obviously intoxicated to the extent that they presented a clear danger to themselves and others, and that intoxication was a proximate cause of the damages suffered.

The standard is deliberately high. Serving someone who was merely drinking is not enough. The plaintiff must prove visible signs, such as slurred speech, stumbling, or belligerence, that a reasonable server would have seen. Section 2.03 makes Chapter 2 the exclusive remedy, so there is no separate common law negligence claim for over-service.

How it works in practice

Evidence comes from tabs and point-of-sale records showing how many drinks were served and when, surveillance video, bartender and patron testimony, and toxicology results from the crash. A blood alcohol level far above the legal limit shortly after leaving a bar is strong circumstantial proof of what the customer looked like at last call.

Section 106.14 gives providers a safe harbor. If the employer required its servers to attend a TABC-approved seller training program, the employee attended, and the employer did not directly or indirectly encourage violations, the employee’s over-service is not attributed to the employer. Defeating safe harbor usually means proving the bar pushed sales or ignored complaints. Section 2.02(c) adds a narrow social host rule: an adult who knowingly serves alcohol to a minor under 18 who is not their own child, or allows the minor to be served on their property, can be liable for the minor’s intoxication.

Why it matters in your case

Drunk drivers are often underinsured, and a catastrophic injury quickly exhausts a 30/60/25 policy. The bar that served the driver typically carries liquor liability coverage in six or seven figures. Austin’s Sixth Street, Rainey Street, and West Campus bar districts make these claims a regular feature of Travis County dockets.

Example

A downtown bar serves Brandon eleven drinks over three hours. Video shows him staggering and knocking over a stool before his last round. Twenty minutes later he hits a motorcyclist on Cesar Chavez Street. The motorcyclist’s dram shop claim rests on the video, the tab, and a blood alcohol result nearly three times the legal limit.

This entry explains Texas law in general terms and is not legal advice for any specific situation. Statutes and case law change; the date above reflects the last review.