Laws and Liability

This is not legal advice. It is a summary of some applicable laws and general suggestions. If you have any questions you should seek independent legal counsel.


As a person who works in a licensed business, there are a number of rights, responsibilities and liabilities that apply to you.

Rights are actions that you can choose to take in the responsible running of your business. Many of them are specified in the law (e.g Business and Professions Code and Government Code). As an example, you have the right to refuse service if someone fails to show you adequate identification.

Responsibilities are actions that you must take under specified circumstances. Again, many of them are spelled out in the law.

Liability occurs when you are held responsible for injury and damage that either occurs to your patrons or is caused by them. Some forms of liability are specified in the law–this is known as statutory liability. Other forms evolve through common law – a set of principles that guide the laying of responsibility in any specific case.

This training is designed to give you skills and knowledge to help you avoid breaking the law and reduce your risk of liability.

Licensees are generally liable for all activities that occur at the licensed business and are responsible for the acts of their agents/employees.

Retail Operating Standards (License Types 20 & 21)

The following requirements apply to off-sale licensed establishments:

  • If requested by law enforcement— Prominent, permanent sign(s) stating “NO LOITERING IS ALLOWED ON OR IN FRONT OF THESE PREMISES”
  • If requested by law enforcement— Prominent, permanent sign(s) stating “NO OPEN ALCOHOLIC BEVERAGE CONTAINERS ARE ALLOWED ON THESE PREMISES”
  • The exterior of the premises, including adjacent public sidewalks and parking lots under the control of the licensee, shall be illuminated during hours of darkness when the premises is open for business
  • Litter shall be removed daily from the premises and swept weekly, including adjacent public sidewalks and parking lots under the control of the licensee
  • Graffiti shall be removed from the premises and parking lots under the control of the licensee within 3 days
  • No more than 2/3 of windows and clear doors shall contain advertising or signs
  • If requested by law enforcement—no incoming calls on public telephones
  • If there is rental or sale of harmful matter (adult videos), the licensee shall create an area labeled “Adults Only”
  • Maintain a copy of the Operating Standards on premises for viewing by the general public

Objectionable Conditions (All license types)

Upon notice from ABC, licensees must take reasonable steps to correct objectionable, conditions that constitute a nuisance, on or in the licensed premises and on abutting public sidewalks up to 20 feet from the premises, within a reasonable period of time.

The following is a list of objectionable conditions:

  • Disturbing the peace
  • Loitering
  • Drinking or drunk in public
  • Urinating
  • Harassing passersby
  • Drug activity
  • Loud music
  • Prostitution
  • Lewd conduct
  • Gambling

Types of Liability

Liability occurs when you are held responsible for injury and damage that either occurs to your patrons or is caused by them. This could include injury and/or damage from things such as slips and falls, fights or drunk driving collisions.

The liability of licensees and their employees falls into three areas of law: criminal, administrative, and civil. One situation that could potentially result in all three types of liability is the sale of alcohol to a minor.

WordPress Data Table

Criminal Liability (Against the Seller)

  • Individual seller held responsible for crime observed by law enforcement officer
  • Penalties
    • fine
    • community service
    • jail
  • Refer to ABC-608 (Quick Summary of Common ABC Laws)

Administrative Liability (Against the Licensee)

  • Fines range from $750 – $20,000
  • Suspension of license
  • Revocation of license
  • Licensee may accept penalty recommendation or request a hearing
  • Penalties decided on a case-by-case basis
  • Type of violation, facts of case and licensee’s past record taken into account
  • Administrative disciplinary action protects the public welfare and morals

Civil Liability (Against Involved Parties)

Statutory Civil Liability

Civil liability refers to the potential civil legal liability of licensees and their seller for injuries caused by their intoxicated patrons. Section 25602.1 of the Business and Professions Code defines statutory civil liability in California. Under the statute, liability exists only when the patron was obviously intoxicated and under age 21 at the time of the sale.

Common Law Duties of Care

Under common law, a licensee has a duty to exercise reasonable care for the safety of his or her patrons. When a licensee is negligent in exercising reasonable care, an aggrieved party may file a common law action in court and civil damages may result. Therefore, if the sale of alcohol is negligent, common law liability may result under common law duties of care, regardless of the customer’s age.

Reckless conduct may also give rise to a lawsuit under common law. Reckless conduct goes beyond mere negligence. Reckless conduct is when a person has intentionally done an act of an unreasonable character; has disregarded a risk that he knew or should have known of; and it was highly probable that harm would follow. It usually is accompanied by a conscious indifference to the consequences.

If the sale of alcohol can be characterized as reckless, the consumer– whether a minor or an adult – can recover for self-inflicted injuries. Or, at a minimum, not file a wrongful death lawsuit by his or her beneficiaries.

Reducing Risk of Liability

Recommendations for reducing the risk of liability:

  • Have responsible promotions
  • Provide training for staff
  • Maintain adequate staffing
  • Have written policies
  • Hire qualified employees
  • Support employees’ decisions

Pertinent Laws

Section 25602.1 Business and Professions Code (Supplying of alcoholic beverage to intoxicated minor):

Notwithstanding subdivision (b) of Section 25602, a cause of action may be brought by or on behalf of any person who has suffered injury or death against any person licensed, or required to be licensed, pursuant to Section 23300, or any person authorized by the federal government to sell alcoholic beverages on a military base or other federal enclave, who sells, furnishes, gives or causes to be sold, furnished or given away any alcoholic beverage, and any other person who sells, or causes to be sold, any alcoholic beverage, to any obviously intoxicated minor where the furnishing, sale or giving of that beverage to the minor is the proximate cause of the personal injury or death sustained by that person.

Section 25658(a) Business and Professions Code (Sale to a Minor):

Every person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage to any person under the age of 21 years is guilty of a misdemeanor.

Section 25658(b) Business and Professions Code (Purchase/Consumption by Minors):

Any person under the age of 21 years who purchases any alcoholic beverage, or consumes any alcoholic beverage in any on-sale premises, is guilty of a misdemeanor.

Section 25658.4 (a) Business and Professions Code (Application and Acknowledgment for Off-Sale of Alcoholic Beverages):

(a) No clerk shall make an off sale of alcoholic beverages unless the clerk executes under penalty of perjury on the first day of that sale an application and acknowledgment. The application and acknowledgment shall be in a form understandable to the clerk.

This section requires every person who sells alcoholic beverages in your store to read, understand and sign a Clerk’s Affidavit.

Section 13202.5(a) Vehicle Code (Use-Lose Law):

A person aged 13-20 convicted of a drug or alcohol related crime the court shall suspend their driver’s license for one year or delay the issuance for one year.


Additional information may be obtained by contacting:

Alcoholic Beverage Control
3927 Lennane Drive, Suite 100
Sacramento, CA 95834

Email us at
Call (916) 419-2500