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Charging For Alcohol Could Cost You

(Credit: Marco Di Lauro/Getty Images)

(Credit: Marco Di Lauro/Getty Images)

feldman_amy Amy Feldman
Amy E. Feldman is a business commentator and legal business...
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By Amy E. Feldman

PHILADELPHIA (CBS) - If you can’t sell alcohol, is it legal to sell the cups and give the alcohol for free. Ha.

University of Arizona chapter of fraternity Pi Kappa Phi was shut down last month after repeated incidents involving excessive alcohol consumption. Or, as many college students call it “the weekend”. But while closing a chapter is a harsh punishment, there are legal penalties that many who serve alcohol don’t even consider.

There are many hosts who charge money to their guests for the alcohol they are serving to offset costs. In the absence of a caterer who’s paid to monitor the alcohol consumption, where a host who would otherwise be considered a social host charges for the alcohol— or, for those who think they are being clever, for the cup but then give the alcohol for free – yes, that is a ruse that will not fool the court – you fall under what’s called the dram shop laws, the much stricter laws that apply to bars and others that make money off the alcohol they sell that can result in huge liability in case a visibly intoxicated guest has an accident after leaving your house party.

It can lead to lawsuits that cost YOU your house, not just your chapter so either don’t charge money for booze or buckle all guests into cabs – or both.

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