Business/Funeral Law Unit 3 Quiz

"What is a contract of sale?"

"A contract where one party (seller/vendor) must deliver and transfer ownership of a good to a second party (buyer/vendee)

"Name the six features of a sales contract."

"Consensual

"What does 'consensual' mean in a sales contract?"

"The contract is perfected by mere consent

"What does 'onerous' mean in a sales contract?"

"The good sold is conveyed in consideration of the price

"What is the Uniform Commercial Code (UCC)?"

"A model act created in 1952 to create uniform rules for sales transactions across states; adopted by all 50 states

"How does the UCC define goods?"

"Tangible items which are movable at the time of identification to the contract for sale."

"How are goods

services

"How were cell phone towers (monopoles) classified in Crown Castle v. Fred Nudd Corporation (2008)?"

"They were ruled to be goods

"What are trade fixtures?"

"Items attached to realty and used for business activities (like a counter or bar); they are treated as goods."

"Why are growing crops considered goods under the UCC?"

"Because they can eventually be extracted and moved

"What are the four ways an entity can be classified as a merchant under the UCC?"

"Regularly selling goods as part of a business or trade

"Why does merchant status matter under the UCC?"

"The Code places greater duties on merchants to protect private citizens

"Under the UCC

what happens if the price term is left open in a contract?"

"Under the UCC

what happens if the delivery term is left open?"

"Which single contract term cannot be left open under the UCC (with limited exceptions)?"

"Quantity

"What is a firm offer under UCC 2-205?"

"An offer made by a merchant in writing; if it doesn't state an irrevocability period

"Does the mirror-image rule apply under the UCC?"

"No. If the terms of acceptance do not mirror the offer

"At what dollar value must a sale of goods contract be in writing under the UCC?"

"$500 or more."

"What is good title?"

"A title obtained from an individual who owns the goods free and clear."

"What is void title?"

"A title passed to the buyer from someone who does not legitimately own the goods; good faith is irrelevant (e.g.

"What is the exception to void title involving entrusted goods?"

"If an owner entrusts goods to a merchant who ordinarily deals in those goods

"What is voidable title?"

"A title where the contract would have been good

"Under the UCC

who bears the risk of loss for goods before the buyer takes possession

"What is a shipment contract

and who bears the risk of loss?"

"What is a destination contract

and who bears the risk of loss?"

"What is FOB destination?"

"A shipping term where the seller assumes risk of loss until the goods are delivered to the buyer's location."

"What is FOB shipment?"

"A shipping term where risk of loss passes to the buyer as soon as the seller delivers the goods to the carrier."

"What is a 'sale on approval'?"

"A sale where goods are delivered to a buyer who can return them if not satisfied after examining or testing them; seller retains title and risk of loss until buyer accepts."

"What is the CISG?"

"The United Nations Convention on Contracts for the International Sale of Goods; the main legal framework for international commercial transactions

"What is a warranty?"

"A guarantee that a good or service will be free from defects and will conform to a certain standard; a legally binding commitment with a remedy (repair/replacement) if breached."

"What is an express warranty?"

"An actual and definite statement of a seller

"What is puffery

and does it create a warranty?"

"What happens when an express warranty is breached?"

"The seller is absolutely liable; claiming due care or lack of knowledge that the warranty was false is not a valid defense."

"What is the implied warranty of merchantability?"

"An implied warranty (applying only to merchant sellers) that goods are fit for the ordinary purposes for which they are sold."

"Why are funeral directors considered merchants for warranty purposes?"

"Because they deal in special goods like caskets

"What is the implied warranty of fitness for a particular purpose?"

"Arises when the seller knows the buyer's specific intended use for goods and the buyer relies on the seller's skill and judgment to select suitable goods."

"Give a funeral service example of breaching the implied warranty of fitness."

"If a funeral director assures a buyer an urn holds 200 cubic inches of cremated remains and it actually holds less

"How can a funeral director avoid warranty liability when discussing product capabilities?"

"By referring to manufacturer descriptions/specs (e.g.

"What is the warranty of title?"

"An implied warranty that the seller has good title to the goods and the right to transfer it

"What is the warranty against infringement?"

"An implied warranty (for merchant sellers) that goods are free of third-party patent

"What four buyer remedies are available under the UCC for nonconforming goods?"

"Cancel the contract

"What is a bill of lading?"

"The contract that exists between the consignor (shipper) and the carrier."

"What is a bill of sale?"

"A document that conveys or provides evidence of title to tangible property."

"What is the difference between a common carrier and a private carrier?"

"A common carrier must convey passengers/freight to anyone who pays the fare (e.g.

"What is a 'sale or return' contract?"

"A contract where the buyer purchases goods intending to resell them

"How can a seller disclaim an implied warranty of merchantability under the UCC?"

"The disclaimer must specifically mention the word 'merchantability' and be conspicuous."

"What language can exclude all implied warranties under the UCC?"

"Expressions like 'as is' or 'with all faults

"What is the Magnuson-Moss Warranty Act?"

"Federal legislation applying to written warranties voluntarily made on consumer products costing more than $25; requires warranties to be labeled 'full' or 'limited' and clearly disclosed."

"What must a seller do to comply with Magnuson-Moss regarding a manufacturer's warranty?"

"Make the text of the warranty readily available

"What is the Truth in Lending Act (TILA)?"

"A federal law that protects consumers against inaccurate/unfair credit billing and requires creditors to disclose loan cost information."

"How is a 'creditor' defined for TILA purposes?"

"A person who regularly extends consumer credit subject to a finance charge

"What does 'regularly' mean for a funeral establishment extending credit under TILA?"

"Extending credit more than 25 times in the preceding calendar year

"Are preneed funeral arrangements subject to TILA?"

"Yes

"What is the purpose of the FTC Funeral Rule?"

"To provide consumers with rights when making funeral arrangements

"Name four things the Funeral Rule prohibits funeral directors from doing."

"Misrepresenting legal/crematory/cemetery requirements

"What are the three price lists mandated by the Funeral Rule?"

"The General Price List (GPL)

"What triggers the requirement to give a consumer a General Price List (GPL)?"

"Discussion in person of funeral good/service prices

"Who is entitled to request a GPL?"

"Anyone -- there are no exceptions to who can request and receive a GPL

"What three pieces of information must appear in a GPL's heading?"

"The name/address/phone number of the funeral provider

"When must a Casket Price List (CPL) be shown to a consumer?"

"Before showing the consumer any actual caskets or alternative containers."

"Why is a photo alone not sufficient to identify a casket on a CPL?"

"Because item descriptions must be detailed enough to clearly identify the casket

"What is required if a funeral establishment offers direct cremation as an option?"

"They must also offer at least one direct cremation selection that includes an alternative container

"What is the Outer Burial Container Price List (OBCPL) disclosure about state/local law?"

"It states that state or local law generally does not require a container to surround the casket in the grave

"What is the Statement of Funeral Goods and Services Selected

and when must it be given?"

"What are cash advance items?"

"Items of service or merchandise described to the consumer as a cash advance

"How is the total cost of funeral arrangements calculated on the Statement?"

"Funeral home charges plus cash advance charges equals the total cost of funeral arrangements."

"What are usury laws?"

"State laws that define the maximum interest rate that may legally be charged on a loan; charging above that rate is illegal in all 50 states."

"What is the Fair Credit Reporting Act (FCRA)?"

"A federal law promoting accuracy

"What are the three major consumer credit reporting agencies in the U.S.?"

"Equifax

"What responsibilities do information furnishers have under the FCRA?"

"Report accurate financial information

"What is the Consumer Product Safety Commission (CPSC) responsible for?"

"Protecting the public from unreasonable risks of injury or death from consumer products

"What does the Flammable Fabrics Act regulate?"

"The manufacture of highly flammable clothing and interior furnishings

"What does the Children's Gasoline Burn Prevention Act require?"

"Portable gasoline containers made for sale in the U.S. after January 17

"What does the Federal Hazardous Substance Act require?"

"Certain hazardous household products to have warning labels; it gives the CPSC authority to regulate or ban hazardous substances."

"What does the Refrigerator Safety Act require?"

"Refrigerators to have a mechanism (usually a magnetic latch) allowing the door to be opened from the inside in case of accidental entrapment."

"What is the underlying economic theory behind antitrust laws?"

"That the public is best served by free competition

"What are the three primary federal antitrust laws?"

"The Sherman Act (1890)

"What does the Sherman Act prohibit?"

"Every contract

"What is the 'rule of reason' in Sherman Act cases?"

"Established in a 1911 Supreme Court ruling

"What is a 'per se' violation of the Sherman Act?"

"An act (like price-fixing or dividing markets) considered so harmful to competition that it is automatically illegal

"What criminal penalties can the Sherman Act impose?"

"Up to $100 million for a corporation

"What does the FTC Act prohibit?"

"Unfair methods of competition and unfair or deceptive acts or practices."

"What authority did Congress give the FTC in 1975 that led to the Funeral Rule?"

"The responsibility of adopting industry-wide trade regulation rules."

"What does the Clayton Act address that the Sherman Act does not clearly prohibit?"

"Specific practices like mergers and interlocking directorates (the same person making decisions for competing companies)."

"What is the legal standard the Clayton Act uses to prohibit mergers?"

"Mergers or acquisitions where the effect may be substantially to lessen competition or tend to create a monopoly."

"What did the Robinson-Patman Act of 1936 add to the Clayton Act?"

"A ban on certain discriminatory prices

"What damages can private parties recover under the Sherman or Clayton Acts?"

"Triple damages for harm caused by conduct violating either Act

"What do truth-in-advertising laws require of advertisements?"

"That they be truthful

"What are the FTC's 'Green Guides'?"

"Guidelines designed to help funeral service providers and other marketers avoid making misleading environmental ('green') claims about their products."

"What do the FTC's Guides Concerning Endorsements and Testimonials require?"

"That testimonials not be misleading

Warranties

Guarantees made by a seller that an article, good, or service will conform to a certain standard or will operate in a certain manner

Express Warranty

The actual and definite statement of a seller, either verbally or in writing, at the time of the sale

Implied Warranties

Protections imposed by law, arising automatically because the sale has been made

FTC

An agency of federal government to promote free and fair competition by prevention of trade restraints, price fixing, false advertising, and other unfair methods of competition

What does the FTC oversee?

Product safety laws, truth in advertising act, truth in lending act, fair credit reporting act