Mortuary Science Professional Review
Business Law Study Guide Questions
and Answers
The written application for permission to incorporate that is approved by a state official .
- ANSWER-Corporate Charter.
Define an independent contractor. - ANSWER-One who contracts to do jobs and is
controlled only by contract as to how performed.
Is a removal service an agent of a funeral home if contracted to make removals? If so,
what type of agent is the removal service? - ANSWER-Special Agent.
What is a negotiable instrument? - ANSWER-A document of payment, such as a check.
What are the three requirements of a valid offer? - ANSWER-1. The offer must be
definite.
2. The offer must appear to be seriously intended. 3. the offer must be communicated to
the offeree.
A legal form of organization whereby a legal entity is authorized by a state to operate. -
ANSWER-Corporation.
Differentiate between a void and a voidable contract. - ANSWER-A void contract is of
no legal effect, which means it cannot be enforced by either party.
A voidable contract is legal, but may be set aside by one or both parties.
List the disadvantages of a partnership. - ANSWER-Lack of continuity.
Decisions are binding on both parties.
Frozen investments.
Collateral is used for the business debt that may be taken if one partner makes a bad
decision.
Unlimited liability of general partners.
Possibility of unsatisfactory division of profits.
Possibility of managerial difficulties - if there is divided control, employees will not know
which of the partners to listen to if the partners disagree.
Define a legal offer. - ANSWER-A proposal to make a contract.
A business organization that is recognized by the law as having a separate legal
existence. - ANSWER-Legal Entity.
, A document specifying the number of shares owned by a stockholder. - ANSWER-Stock
or Stock Certificate.
Define fungible goods. - ANSWER-Goods of a homogeneous nature sold by weight or
measure.
Define Caveat Emptor. - ANSWER-Let the buyer beware.
Insurance that protects a firm against claims that its product caused bodily injury or
property damage to the user. - ANSWER-Product Liability Insurance.
List the duties owed by an agent to a principal. - ANSWER-Loyalty and good faith.
Obedience.
Reasonable skill and diligence.
Accounting Information.
For a person to recover damages due to a negligence tort, what 4 things must be
proven? - ANSWER-1. A duty of a tortfeasor. 2. Breach of that duty.
3. The breach was the actual and proximate cause of the injury.
4. Injury or damage.
List the duties owed by a principal to an agent. - ANSWER-Compensation.
Reimbursement. Indemnification.
Abidance by the terms of the contract.
Define a deed. - ANSWER-A writing conveying title to real property.
List the advantages of a corporation. - ANSWER-Continuity in existence.
Ease of ownership.
Limited liability.
Large financial capability.
Specialized management - since large companies can hire people to handle specific
areas of management.
Legal entity - the company is considered separately from the personal assets of the
owners.
What are some common ways to manage the risk associated with a funeral home? -
ANSWER-1. Eliminate Risk.
2. Minimize Risk.
3. Shift the Risk.
4. Absorb the Risk.
What is meant by self insurance? - ANSWER-All of us practice a form of self insurance
if we have a savings account for a rainy day. Self-insurance means putting some funds
aside to be used if needed during an emergency.
Business Law Study Guide Questions
and Answers
The written application for permission to incorporate that is approved by a state official .
- ANSWER-Corporate Charter.
Define an independent contractor. - ANSWER-One who contracts to do jobs and is
controlled only by contract as to how performed.
Is a removal service an agent of a funeral home if contracted to make removals? If so,
what type of agent is the removal service? - ANSWER-Special Agent.
What is a negotiable instrument? - ANSWER-A document of payment, such as a check.
What are the three requirements of a valid offer? - ANSWER-1. The offer must be
definite.
2. The offer must appear to be seriously intended. 3. the offer must be communicated to
the offeree.
A legal form of organization whereby a legal entity is authorized by a state to operate. -
ANSWER-Corporation.
Differentiate between a void and a voidable contract. - ANSWER-A void contract is of
no legal effect, which means it cannot be enforced by either party.
A voidable contract is legal, but may be set aside by one or both parties.
List the disadvantages of a partnership. - ANSWER-Lack of continuity.
Decisions are binding on both parties.
Frozen investments.
Collateral is used for the business debt that may be taken if one partner makes a bad
decision.
Unlimited liability of general partners.
Possibility of unsatisfactory division of profits.
Possibility of managerial difficulties - if there is divided control, employees will not know
which of the partners to listen to if the partners disagree.
Define a legal offer. - ANSWER-A proposal to make a contract.
A business organization that is recognized by the law as having a separate legal
existence. - ANSWER-Legal Entity.
, A document specifying the number of shares owned by a stockholder. - ANSWER-Stock
or Stock Certificate.
Define fungible goods. - ANSWER-Goods of a homogeneous nature sold by weight or
measure.
Define Caveat Emptor. - ANSWER-Let the buyer beware.
Insurance that protects a firm against claims that its product caused bodily injury or
property damage to the user. - ANSWER-Product Liability Insurance.
List the duties owed by an agent to a principal. - ANSWER-Loyalty and good faith.
Obedience.
Reasonable skill and diligence.
Accounting Information.
For a person to recover damages due to a negligence tort, what 4 things must be
proven? - ANSWER-1. A duty of a tortfeasor. 2. Breach of that duty.
3. The breach was the actual and proximate cause of the injury.
4. Injury or damage.
List the duties owed by a principal to an agent. - ANSWER-Compensation.
Reimbursement. Indemnification.
Abidance by the terms of the contract.
Define a deed. - ANSWER-A writing conveying title to real property.
List the advantages of a corporation. - ANSWER-Continuity in existence.
Ease of ownership.
Limited liability.
Large financial capability.
Specialized management - since large companies can hire people to handle specific
areas of management.
Legal entity - the company is considered separately from the personal assets of the
owners.
What are some common ways to manage the risk associated with a funeral home? -
ANSWER-1. Eliminate Risk.
2. Minimize Risk.
3. Shift the Risk.
4. Absorb the Risk.
What is meant by self insurance? - ANSWER-All of us practice a form of self insurance
if we have a savings account for a rainy day. Self-insurance means putting some funds
aside to be used if needed during an emergency.
