Fourth Quarter Final Exam Flashcards
Difference between civil and criminal law
- Civil Law: Laws concerning private rights between individuals
- Criminal Law: Laws concerning offenses against society as a whole
Law
rule of civil conduct commanding to do what is right and prohibiting what is wrong
Equity
relief sought in lieu of money damages which would be awarded by a law court. Ex: suit in equity for a restraining order
Administrative Agency Law
- Commissions created by legislature
- Enact rules to regulate business and industry
(ex. FTC, OSHA ADA)
Defendant
person being sued
Summons
served upon defendant
Subpoena
served on a witness
Offer and Acceptance
offeror proposes terms to an offeree
Only the offeree can accept the offer
Acceptance
assent to an offer indicating an agreement to accept it’s term
Mailbox Rule
contract/agreement/paperwork must be postmarked by a certain time
Business Law
laws regarding the performance of business and commercial transactions
Common Law
- History and source of American Laws
- a custom which has become recognized by the courts as binding on the community. Still referred to today in some cases.
- Laws the Pilgrims brought from England.
Case Law
- Appellate court decisions
- stare decisis (stand by the decision)
Civil Law
laws concerning private rights between individuals
Jurisdiction
- subject matter
- court must have authority to hear a particular case;
- personal (over the parties)
Venue
location where a case is heard
(ie: state, county, city)
Classification of the State Court System
a)Trial court – court of original jurisdiction. Known by many names depending on the state and location
b) Appellate Courts
1. Court of Appeals
2. Supreme Court of the state
Are contracts with a minor valid?
Yes, voidable (the minor’s option) except for necessities
Are contracts from incompetent people valid?
- Adjudicated Incompetent people= void
- Nonadjudicated Incompetent people= voidable like a minor until person is adjudicated
Stare Decisis
the legal principle of determining points in litigation according to precedent.
- to stand by things decided
Requirements of a valid contract
mutual agreement
competent parties
consideration
legality
Bailment
Transfer of possession, but not title, to personal property from the owner to another for a particular purpose, such as protect, fix, use, store, or sell
Bailor
Owner of personal property
Bailee
The person to whom property is transferred
Types of Bailment and Liability of Bailee
- Degree of liability of the bailee in the event of loss or damage
- Sole benefit bailor
- Sole benefit of bailee
- Mutual benefit of both parties
Sole Benefit of Bailor
Slight degree of care
Sole Benefit of Bailee
Extraordinary care
Mutual Benefit of Both Parties
Reasonable ordinary care
What type of bailment should funeral homes possess?
Mutual benefit bailment and reasonable care must be exercised
Assignments
transferring rights under a contract to a 3rd party; assignor to assignee
Reason to Terminate Contracts
- Performance: must be substantial and satisfactory to both parties
- By Operation of Law: Bankruptcy, expiration of statute of limitations (5 years for verbal, 10 years for written), material alteration of a written contract
- Impossibility of Performance: death (can have exceptions), insanity, illegality
- Voluntary Agreement to terminate contract
What contracts are illegal by statute?
a) Gambling Contracts
b) Sunday Contracts
c) Usury
d) Unlicensed Operators
e)Sale of Prohibited Articles
f) Restraint of Trade
Types of Money Damages
compensatory
punitive
nominal
liquidated
compensatory
Actual damages you suffer.
Punitive
money awarded to punish the other party; over or above
Nominal
breach of contract but no one suffers
Liquidated
amount of money shown in contract if contract is breached
Ex. If you break your apartment lease, you have to pay 1000 dollars, the 1000 dollars is a liquidated money damages.
Fraud
- misrepresentation of a material fact made knowingly, or with the reckless disregard as to its truth or falsity.
- Made to influence or induce someone to act on your statement/contract to their detriment
Duress
physical or economic threat to a person
Undue Influence
removing a person’s free will through a fiduciary relationship
(Ex. A husband forces a wife to sign her right to something away)
What three actions make a contract voidable?
- Fraud
-Duress - Undue Influence
What is a Contract of Sale?
concerns existing goods
Contract to Sell
- concerns future goods, meaning not yet in existence or owned by seller at the time of the transaction.
- title will pass at some point in the future, usually upon delivery to buyer
who bears the risk of loss during the transfer of goods to buyer?
- when title passes, so does risk of loss
- In a sale, title generally passes immediately when parties agree on the goods and the price
- Note: parties can agree in the contract who will bear the risk of loss and when. This will control over the UCC.
Bearer Paper
Payable to the order of cash or bearer or to oneself
(Ex. A physical dollar)
Order Paper
Payable to the order of a named person; must be a legal entity
(Ex. A check)
Drafts
An order to pay
Promissory Notes
A promise to pay
Drawer
Executes (signs) a draft, makes the order to pay
(funeral home owner writes a check to an employee: the owner is the drawer)
Drawee
The one ordered to pay a draft
(The bank)
Payee
One to whom a payment is made
(employee)
Maker
Executes (signs) a promissory note
(Susan creates a promissory note to pay Joe $10: Susan is the maker)
Endorser
One who endorses an instrument on the reverse side
Endorsee
One who has an instrument made payable to them through an endorsement
Blank Endorsement
An endorsement that only needs the signature of the endorser
Special Endorsement
An endorsement MADE PAYABLE TO ANOTHER person
Restrictive Endorsement
An endorsement that limits the use of negotiation for a particular PURPOSE
Qualified Endorsement
An endorsement that limits the liability of the endorser for payment; “Without Recourse”
Negotiation
Transferring ownership of the negotiable instrument from one person to another
Issuing
The first negotiation to the original payee
How many requirements are there for an instrument to be negotiable?
- Signed Writing
- Order to pay if it is a draft/promise to pay if it’s a note
- Unconditional
- Sum certain in money, an national medium of exchange which is legal tender where payable
- Payable on demand (Immediately upon presentation or on a fixed future date)
- Payable to the order of a named payee or bearer
- Payee and drawee must be identified as real entities
Real Estate Mortgage Note
A promissory note secured by REAL property
Collateral Note
A promissory note secured by PERSONAL property
(Personal property: property that is not permanently affixed to land: e.g., equipment, furniture, tools and computers.)
(Ex. Car note)
Debenture
A promissory note issued by a corporation under seal but is NOT secured
- promissory note under seal but not secured
Cashier’s Check
A draft in which the same bank is both drawer and drawee; it is drawn on bank’s own funds
Certified Check
A draft in which money is segregated out of an account and put in a separate account; bank stamps CERTIFIED on front
Bank Draft
A draft that utilizes two banks; one is drawer, the other is a drawee
Inland Draft
A domestic draft that is both drawn and payable within the U.S.
Foreign Draft
An international draft that is either drawn or payable outside the U.S.
Sight Draft
A draft payable immediately upon demand at the sight of drawee
(Ex. Check has current or past date on it so you can take it to the bank and deposit it.)
Time Draft
A draft payable on a fixed future date or certain number of days after date
Trade Acceptance
A draft involving sales of goods
In a Trade Acceptance, who is the drawer?
Seller
In a Trade Acceptance, who is the payee?
Seller
In a Trade Acceptance, who is the drawee?
Buyer
How are order papers negotiated?
By endorsement and delivery
(sign the back of the check and take it to the bank)
How are bearer papers negotiated?
By delivery alone
(take cash to the bank to deposit it; no signature needed)
Where do you make an endorsement?
Along the trailing edge on the back of the instrument
Allonge
Paper firmly attached to an instrument so as to become a part of it
Holder in Due Course (HDC)
A holder who has superior rights on instrument
What are limited defenses for non-payment (in exception of a HDC)?
- Ordinary Contract Defenses
- Conditional Delivery
- Payment
- Theft
- Fraud including execution of instrument
- Improper completion
- Non-Delivery
What are universal defenses for non-payment (including a HDC)?
- Minority
- Fraud as to nature of instrument
- Discharge in bankruptcy
- Forgery
ADA Requirements for Employees
– if 15 or more employees, funeral home must provide reasonable accommodation to do the job if does not cause undue hardship to funeral home
Traditional Common Law Right of Disposition Order
- spouse
- competent adult children – majority rules
- competent parents
4- competent siblings
5- nearest next of kin in line of inheritance according to probate statute of the state. State statutes – vary by state
State Statutory Exceptions to Right of Disposition
- Wishes of decedent: specific directions in a will, health care power of attorney or other directive.
- Other Directives: including, Special Power of Attorney, cremation authorization form, pre-need contract, and donation to medical science or directive pursuant to a state statute.
- 48 states allow a person to name in a directive or other document the person they wish to make decisions regarding their disposition. Read your own state statute.
Specific Standards Applicable to Funeral Homes
- formaldehyde monitoring (1988): PEL for TWA (.75), STEL (2.0), ACTION LEVEL (.5)
- hazardous communication (1988):Disclosure law about hazardous chemicals for protection of employees
- blood borne pathogens(1988): provide Hepatitis B vaccination and other requirements. Also, a disclosure law regarding diseases.
- needlestick safety and prevention act of 2000:Requires F.H. to have needlestick exposure control plan updated annually and Sharps container requirements.
General Price List (GPL) requirements from FTC
- Heading : name, address and phone number of F.H., GPL and effective date
- Must be a list of 16 goods and services separately priced that the funeral home offers
- Six mandatory disclosures on GPL
- Basic service charge
What are the Six Mandatory Disclosures Required on the GPL?
- choice of goods and services
- non-declinable service fee
- embalming disclosure
- availability of casket price list
- availability of OBCPL
- alternative containers for direct cremation
FTC Requirements for the Casket Price List (CPL)
- CPL must have name of funeral home, title, effective date and include any alternative containers and any caskets offered for sale.
- Does not have any mandatory disclosures
FTC Requirements for the Outer Burial Container Price List (OBCPL)
- OBCPL must have name of funeral home, title, effective date and any outer burial containers offered for sale
- 1 mandatory disclosure: Outer Burial Containers are not required by law but may be a cemetery requirement
Magnuson-Moss Warranty Act (1975)
allows Funeral Homes (sellers of merchandise) to disclaim warranties
if the seller does it by using specific language that is presented to consumers in a clear and conspicuous manner; federal statute governs warranties on consumer products. The law does not require any product to have a warranty (it may be sold “as is”), but if it does have a warranty, the warranty must comply with this law.
Tort
An offense against a person or their property
Elements of Proof for an Intentional Tort
- volitional act
- intent
- causation
- injury
Elements of Proof for a Negligent Tort
- duty of care
- breach of the duty
- causation
- damages/injury
Pallsgraf Case
- element of “foreseeability”
- Forsee that your actions may cause injury
Difference between Law and Ethics
- Laws set a lower standard of what is acceptable conduct
- Ethical standards are higher
- An unethical action is not necessarily a crime
- A crime is generally an unethical act
Ethical Conduct as Applied to Funeral Homes
- A primary goal should be more than just making a profit
- Funeral homes held to a higher ethical standard than other businesses
- Conduct should emphasize “best service possible”
- courts have held funeral homes to a higher degree of care than normal because of the mental suffering that the family is already experiencing when they come to your funeral home
- Practice “Total Quality Management”; ensure that all employees practice ethical conduct
- Comply with “Ethical Rules” enacted by State Department of Professional Regulation
What law allows one to donate themselves?
- The Revised Uniform Anatomical Gift Act (UAGA)
- Allows those 18 and up to donate their organs/tissues for medical purposes
- A person who signs to have themselves donated signs a “first person consent”. It is legally binding
Does the funeral home have to notify survivors or get their permission for donation under the UAGA?
no
Revocabable Pre-Need
A pre-need contract that can be canceled and refunded
Non-Revocable Pre-Need
A pre-need contract that can not be canceled and refunded
Guaranteed Pre-Need
- the costs of certain individual items or the cost of the total package will never be more to your family or estate.
- Funeral home agrees to “freeze” their prices and can not charge family what their charges are at time of death
Non-guaranteed Pre-Need
the funeral home will not guarantee today’s price’s for future needs, the account will still gain interest, but additional money may be due at the time of the at-need funeral arrangements.
Tax Consequences for Pre-Need Contracts
interest earned on trust is taxable, but not on insurance
When must funeral homes have OSHA training?
All OSHA standards require yearly employee training with training records to be kept for 5 years.
How long must funeral homes keep the medical records of their employees?
Medical records must be kept for 30 years from date employee left work for whatever reason
Householder
- Owner of the property where the deceased resided at the time of death.
- May have a right if not a duty, if there is no one else.
Truth in Lending Act
- Mandates that all businesses that extend credit (pay over time) to consumers apprise them of all aspects of the credit arrangements.
(Funeral Home must give you a thorough financial statement if you’re taking out a loan/paying over time)
What is the only non-declinable charge on the GPL?
Basic service charge
Personal Property
Property that is movable
Real Property
- Property that can not be moved
- includes the land and any permanent improvements to the land like buildings, fences, landscaping, driveways, sewers, or drains.
Fixtures
personal property permanently attached to the land or a permanent structure
Methods of Acquiring Property
- Purchase
- Inherit
- Gift
- Accession
- Creation
- Accretion
Joint Tenancy with Right of Survivorship
- Owned together equally, but if one dies, the survivor receives the entire property
- Joint tenancy overrides a will/probate
Tenancy in Common
property is owned by multiple people, but if one dies, that persons heirs receive that part of the property
Tenancy by the entirety
like joint tenancy, but for spouses only.
if one owner dies, the creditor can not go after the survivor who now owns the property
Warranty Deed
- A deed that guarantees complete ownership of the property
- Best Deed to receive
- guaranteeing that they have a defensible ownership interest in the property and can therefore transfer their ownership interest to the other party (the buyer).
Quitclaim Deed
- Transfers whatever interest the grantor may have
- a quitclaim deed makes no ironclad promise about the title status of a property, or any liens against it or encumbrances.
- usually done between people who are related (husband and wife, siblings etc.)
Trust Deed or Deed into a Trust
- Owners (trustors) put the deed (quitclaim) to the property in a trust but name themselves or others as beneficiaries
Trustee’s Deed
A deed executed by a trustee.
- Transfers ownership from the trust to a third party
Fee Simple
- Type of ownership that survives your death and becomes part of your estate
- If you die, the ownership goes to your heirs
- Best type of ownership to have
what type of carrier are funeral homes?
Private Carriers
Consignor
Gives goods to carrier to transport
Consignee
Person to whom goods are shipped
Bill of Lading
Contract between consignor and the carrier
Liability of Common Carrier Goods
Strict liability for loss to goods regardless of fault
Liability of Common Carrier of People
Not strict liability, must be showing of negligence
- for planes and trains etc: duty of care is reasonable when in the terminals and highest degree of care when on board
General Agency
Can do all of the principal’s business of a particular kind
Special Agency
Only authorized to do a specific act or acts
Partnership
Association of two or more people to carry on a business for profit
General Partnership
- Most common form of partnership
- Created under the Uniform Partnership Act (UPA)
- Partnership ownership is tendency in common
Limited Partnership
- At least one partner is limited as to their liability
- state must have a limited partnership act
Trading Partnership
Deals in goods
ex. casket manufacturer
Non-Trading Partnerships
- Deals in services
- funeral homes are considered non-trading partnerships
Secret Partnership
- Partner is not known to the public but has a voice in management
Silent Partner
- Partner not is known to the public and has no voice in management
Dormant Partner
Combination of both silent and secret partner
Nominal Partner
- Partner in name only.
- Known to the public and has no voice in management
Liability of Partners
Fiduciary relationship (a relationship of trust)
Capital Stock
Declared value of outstanding stock
Common Stock
Has voting privileges
- Proxy: authoriation given to someone by a common stockholder to vote on their behalf
Preferred Stock
- Special advantages for dividend and capital
- Has not voting privileges
Par Value Stock
Has assigned face value
Treasury Stock
Stock reacquired after saile
Watered Stock
Stock paid for with property of inflated value
Testator
Man that is making a will
Holographic Will
A will that is written in the handwriting of the testator/testatrix
- not recognized in all states
Noncupative
An oral will
- can include dying declarations
- must be witnessed and usually only applies to personal property
(ex. soldiers’ or sailors’ will)
Codicil
A witten amendement to a will
Abatement
A certain percentage of a gift is deducted to comply with terms of the will
Probate Court
Court that administers and oversees the distribution of an estate
Devise
A gift of real property
Devisee
The one that inherits the gift of real property
Legacy/ Bequest
Gift of personal property
Legatee
One who inherits personal property
Executor
One named in the will by the testator to administer the estate
Administrator
One appointed by the court to administer the estate
Per Stirpes Distribution
the beneficiary’s share of the estate will pass to the beneficiary’s descendants or heirs
ex. if aunt betty dies before granny, aunt betty’s share of granny’s estate will go to Tavia
Per Capita Distribution
- all living members of the beneficiary group receive an equal share.
- If a beneficiary dies before the testator, the deceased beneficiary’s share is returned to the estate and distributed evenly among the surviving beneficiaries
ex. if aunt betty dies before granny, her share is not passed to Tavia. It will be given to aunt Janet
Intestate Succession
- Occurs when someone dies without leaving a valid will
- Distribution of estate will go by the probate acts of each state (will go through probate court and they will follow the laws of the state according to distribution)
When can a Small Estate Affidavit be used?
- Deceased owned no real property and…
- Value of all personal property is usually not more than $100,000 (depends on state statute)
- Can avoid going to court
Transfer on Death Instrument
A deed that takes effect when you die
Insolvent Estate
Value of an estate’s assets are less than the total debts and liabilities owed
Solvent Estate
Enough money in estate for funeral expenses
