Chapter 12 Liability and the Sale of Alcohol Alcoholic Beverages and Hospitality Chapter 12 14 Review o Restaurants and bars have various goals concerning the sale of alcohol some of which are conflicting Liquor is a moneymaker Restaurants and bars have significant motivation to moderate their promotion of alch o Gov t shows NO leniency enforcing liquor laws o Violation can result in substantial liability o Intoxicated persons are frequently belligerent and cause disturbances that interfere w other patrons o Potential Consequences Revocation of liquor license May result in closure of business Jail time Legal fees Payment for injuries and property damage in a civil suit o Liquor establishment is well advised to strictly follow the law o License to sell liquor No business can sell alcohol without first obtaining a liquor license from the state Once granted a license may be revoked or suspended by the state if the licensee violates the liquor laws To qualify for a license the applicant must prove that Have not abused liquor in the past o As a consumer seller driver etc Has not been convicted of a felony o Illegal sales Is otherwise of good character In most states sales are prohibited to people who are Under 21 Visibly intoxicated Known habitual drunkards Effects of alcohol are potentially dangerous A restaurant that illegally provides alcohol risks harsh penalties Suspension revocation of a liquor license Civil liability for injuries caused by the patron who was wrongfully served Criminal liability for serving underage patrons Jail and fines o Sales to underage It is the responsibility of the restaurant or bar to ask for acceptable ID Management must determine what qualifies as acceptable State issued driver s license State issued non driver ID card Military ID card Passport Fake ID s Frequently reinforce to employees the importance of confirming age In many states it is illegal for people under 21 to misrepresent their age or present false ID Purchasing alcohol for Underage Drinkers If the licensee has no reason to know that the underage person would gain access to the alcohol there is no liability o Ex Sliger buying beer for his 20 year old son A seller will incur liability if they should have known that the adult purchased the alcohol for a minor Academic Exception Academic courses in which tasting alcohol is required o Sales to People who are visibly intoxicated for institutional purposes A person s appearance or actions must indicate they are intoxicated Slurred speech Bloodshot glassy or watery eyes Poor coordination Test which of the following is not a sign of Flushed face intoxication Can be difficult to detect Servers should be trained to recognize o Proving Visible Intoxication Various people may have observed the customer Use of a breathalyzer that measures blood alcohol contact Other factors to aid in proving that a bar served a patron If BAC is 08 or higher a person is legally intoxicated illegally Failure by the facility to train its employees about alcohol consumption and intoxication indicators Absence of a policy identifying how much liquor can be served to a customer Rotation of wait staff in the course of an evening so that no one server keeps track of the amount a particular patron drinks o Sales to known habitual drunkards Someone who regularly drinks alcohol and frequently becomes intoxicated Alcohol Vendors Liability under Common Law o Licensees face potential liability for injuries caused by a customer who is served alcohol illegally o Under common law licensee was not liable for damages caused when it served alcohol illegally and that patron was injured or caused injury to another o As the number of alcohol related accidents grew most states found the common law rule unsatisfactory o Common law rule did nothing to encourage the server to prevent patrons from abusing alcohol o Another weakness was that many intoxicated persons who cause injury have little money with which to compensate those they injure o Owner of a restaurant or bar is more likely to have insurance and assets Dram Shop Acts o Discourage proprietors from selling alcohol illegally o Afford compensation to victims whose injuries emanate from the unlawful sale of alcohol o Potential liability is very important o Verdicts have financially ruined the bar or restaurant involved o In a few states damages are capped at a specific amount on the theory that the major share of the responsibility should fall on the intoxicated driver o Not restricted to car accidents o Can include injuries resulting from fights o Alcohol Vendor s Liability to the Patron Dram shop acts do not impose liabilities for injuries to wrongfully served customers as distinct from a third person But they do impose liability only to a 3rd party person Minority Rule A minority of states allow the wrongfully served patron to sue the licensee for resulting injures o Some based on state s dram shop law o Some based on negligence o Alcohol Vendor s Liability to Third Parties The bar may be held liable to others who are injured from the patron s intoxication o Alcohol Vendor s Liability to passengers in patron s car If passenger purchased alcohol or encouraged driver to drink most states will not impose dram shop liability If passenger did not contribute to driver s intoxication the bar or restaurant may be liable for passenger s injuries o If a visibly intoxicated person is served first at one bar then at a second one both will be held liable Liability will be allocated between the bars If the drinker was not visibly intoxicated until he arrived at the 2nd bar the first bar will not be liable o Apportionment of Liability among defendants In some states comparative negligence applies A restaurant or bar can reduce its liability by the percentage of liability attributed to the driver o Apportionment of Liability where plaintiff is negligent If the person injured contributed to the cause of the accident the injured person s recovery will be reduced accordingly o Dram Shop Liability on some employers for office parties Potential liability for employers Supplying alcohol at company events held at a location other than the premises of a liquor license Some states hold the company liable to someone who is injured by an illegally served attendee Social Host may be liable to a third party injured by an underage guest who has consumed alcohol provided by the host Strategies to Avoid Liability know the ones in the picture below o Adopt internal