Should Materials Be Included in a Services Agreement?

William Slivinsky
3 days ago
15 min read

A services agreement is often used when a business provides labour, skill, time, advice, installation, repair, maintenance or other practical services to a customer.

But many service providers do not only provide services.

They also supply materials. So, should materials be included in a services agreement ?

The commercial reason is simple. A service provider may be able to buy materials at better trade prices, manage VAT more efficiently, control the quality of products used, reduce delays, and increase profit on the overall job. There is nothing automatically wrong with that. In many businesses, supplying materials is a normal and sensible part of the service model.

But with that extra earning opportunity comes extra legal risk.

That risk cannot be overlooked.

The point of this article is not to tell service providers to stop making money on materials. The point is to explain that materials should be treated properly and, in many cases, separately from the pure service element. If materials are simply pushed into a basic services agreement without proper structure, the business may create legal problems it did not intend to create.

A builder may provide labour and bricks. A flooring installer may provide labour and flooring. A kitchen fitter may provide labour and units. A plumber may provide labour and parts. A decorator may provide labour and paint. A contractor may provide labour, fixings, sealants, adhesives, fittings, tiles, doors, equipment or other products as part of the same job.

The business may call the document a “services agreement”.

But legally, that may not be the full picture.

If the business supplies goods as well as services to a consumer, the agreement may need to deal not only with Chapter 4 of the Consumer Rights Act 2015, which concerns services, but also Chapter 2, which concerns goods.

That is why business owners should be careful before placing labour, materials, products, warranties, specifications and aftercare obligations into one simple services agreement without thinking through the legal structure.

One important point before we go any further: this article is about business-to-consumer situations where a service provider supplies materials or goods as part of the service. If you want the wider article about what a services agreement is, and what it is not, you may want to read this first: https://www.businesslegaladvice.co.uk/post/what-is-a-services-agreement-and-what-is-it-not

If you provide services mainly to other businesses, this may not be the right article for you. You may want to read this instead: https://www.businesslegaladvice.co.uk/post/business-to-business-services-agreements-what-uk-service-providers-need-to-know

Should Materials Be Included in a Services Agreement — They May not but if they are they it should be structured properly

The answer is not to avoid supplying materials.

For many service providers, supplying materials is commercially sensible. It can increase profit, improve control over the job, reduce customer error, and ensure that the business works with products it understands.

The problem is not the supply of materials.

The problem is treating materials as if they are only a small detail inside a basic services agreement.

Where materials are important to the job, they should usually be dealt with separately or through a clear materials schedule. That does not always mean a completely separate contract. It may mean a separate section, schedule, specification, product document, warranty note, or customer selection form attached to the main agreement.

Why Materials Make a Services Agreement More Complicated

The legal structure should make clear what is labour, what is materials, who selected the materials, who supplied them, what specification applies, what warranties apply, what aftercare is required, and what risks or limitations the customer has been told about.

That is how a business can still earn properly from materials while controlling the legal risk that comes with supplying them.

Why Materials Make a Services Agreement More Complicated

A simple services agreement usually focuses on labour.

It may deal with what service will be provided, when the service will be carried out, how much the customer will pay, what is included, what is excluded, what warranty is offered, how changes are agreed, and how complaints are handled.

That may be suitable where the business is genuinely only providing a service.

But if the business also supplies materials, the legal position changes.

The agreement is no longer only about whether the service was carried out with reasonable care and skill. It may also involve questions about the goods supplied.

Were the materials of satisfactory quality?
Were they fit for a particular purpose?
Did they match their description?
Did they match a sample or model?
Were the correct specifications provided?
Were the correct care instructions given?
Were manufacturer instructions followed?
Were limitations explained before the customer agreed?

Those are not only service questions.

They are goods questions.

That is why a business should not automatically assume that one basic services agreement is enough.

Chapter 4 Deals with Services, But Chapter 2 Deals with Goods

The Consumer Rights Act 2015 separates different types of consumer contracts.

Chapter 4 deals with services. That includes the duty to perform the service with reasonable care and skill, and

Chapter 2 deals with goods. That includes important terms about goods being of satisfactory quality, fit for a particular purpose, and matching their description.

This matters because a contract can be mixed.

A mixed contract may involve goods and services at the same time.

For example:

a flooring company supplies the flooring and installs it;
a kitchen company supplies the units and fits them;
a plumber supplies parts and installs them;
a builder supplies materials and carries out the works;
a decorator supplies paint and applies it;
a tradesperson supplies fittings and installs them.

In those situations, Chapter 4 may apply to the service element, and Chapter 2 may apply to the goods element.

That does not mean the business needs to panic.

But it does mean the business needs to understand what it is actually supplying.

If the business supplies both labour and materials, the agreement should not be drafted as if only labour exists.

The Main Legal Risk: Calling Everything a Service

One of the biggest mistakes is calling the whole arrangement a “service” and ignoring the materials.

That may feel simple.

It may also feel commercially convenient.

But it can create legal risk.

For example, a services agreement may say:

“Installation of wooden flooring, including labour and materials.”

That wording may look harmless. But it raises important questions.

Who selected the flooring?
Who supplied it?
Was the flooring sold by the trader?
Was it chosen by the customer?
Was it recommended by the trader?
Was it suitable for the room?
Was the customer told about maintenance restrictions?
Were manufacturer instructions provided?
Were risks around water, heat, movement, expansion, underfloor heating, subfloor condition or cleaning explained?

If the floor later fails, the dispute may not be limited to whether the installation was carried out with reasonable care and skill.

The customer may also argue that the goods were not suitable, not properly described, not fit for the particular purpose, or not of satisfactory quality.

This is why the materials part of the transaction must be controlled clearly.

The Pros of Including Materials in the Same Agreement

Including materials in the same agreement is not always wrong.

In some cases, it can be useful.

It may give the customer one clear document showing what they are buying. It may help the business control the whole project. It may make the quote easier to understand. It may reduce confusion about who is responsible for supplying what.

It can also make sense where the business wants to supply approved materials only, because it knows those products, understands how they perform, and is prepared to install them.

There are practical benefits.

The agreement can identify the exact materials.

It can attach the product specification.
It can explain what is included in the price.
It can record what is excluded.
It can state whether manufacturer warranties apply.
It can explain care and maintenance requirements.
It can make clear whether substitute materials can be used.
It can prevent the customer from later saying that different goods were promised.

So the problem is not simply that materials are included.

The problem is when materials are included badly.

The Cons of Including Materials in the Same Agreement

The downside is that including materials can increase legal exposure if the agreement is not properly structured.

A business may think it is only responsible for installation.

But if the business supplied the goods, recommended them, described them, or selected them for the customer, it may face arguments about the goods as well as the service.

This can be especially risky where the agreement does not separate:

labour;
materials;
product selection;
manufacturer specifications;
customer choices;
care instructions;
limitations;
warranties;
aftercare;
risk warnings;
installation assumptions.

Without that separation, the business may struggle to show where the service obligation ends and the goods obligation begins.

For example, if a customer complains that a floor failed, the dispute may involve both questions:

Was the floor installed with reasonable care and skill?

Were the materials suitable for that room and use?

If the same agreement simply says “supply and install flooring”, the business may have made the dispute wider than it needed to be.

Materials Should Not Be Avoided — They Should Be Structured Properly

The answer is not to avoid supplying materials.

The problem is not the supply of materials.

The problem is treating materials as if they are only a small detail inside a basic services agreement.

That is how a business can still earn properly from materials while controlling the legal risk that comes with supplying them.

When Including Materials Is Not Legally Sound

Including materials in the same agreement may be legally weak where the document does not properly explain what role the business is taking.

Is the business only installing materials chosen and supplied by the customer?

Is the business sourcing materials as the customer’s instruction?

Is the business recommending the materials?

Is the business selling the materials to the customer?

Is the business selecting the materials because of its own expertise?

Is the business passing on a manufacturer specification?

Is the business giving its own warranty on the materials?

Those are different legal positions.

They should not all be treated the same.

A short clause saying “materials included” is often not enough.

The business should think carefully before accepting responsibility for materials without controlling the specification, suitability, care instructions, limitations and evidence.

This is especially important in trades where product performance depends on conditions outside the product itself, such as flooring, kitchens, bathrooms, roofing, glazing, joinery, heating, plumbing, damp works, decorating, electrical works and building materials.

Sometimes the safer structure is not one broad services agreement.

The safer structure may be:

a main services agreement;
a separate materials schedule;
a product specification sheet;
a customer selection form;
a risk warning;
a manufacturer warranty document;
an aftercare sheet;
a signed variation form;
a clear exclusion where customer-supplied materials are used.

The question is not whether one document or several documents are used.

The question is whether the legal structure is clear.

Customer-Supplied Materials Should Be Treated Differently

A major distinction is whether the materials are supplied by the business or by the customer.

If the customer supplies the materials, the service provider should not simply treat the job in the same way as if the trader supplied them.

The agreement should make clear that the customer is responsible for selecting and supplying those materials, unless the trader has expressly advised otherwise.

But that does not mean the service provider can ignore obvious problems.

If the customer supplies unsuitable materials, damaged materials, incomplete materials, or materials that are plainly inappropriate for the job, a competent service provider should not blindly proceed.

The business should record the issue.

It should warn the customer.
It should explain the risk.
It should confirm whether it is prepared to continue.
It should consider refusing the work if proceeding would be inconsistent with reasonable care and skill.

This links back to the wider services agreement issue. A customer instruction is not always enough. The business must still ask whether it is professionally reasonable to proceed.

Trader-Supplied Materials Need Product Control

If the trader supplies the materials, the agreement needs stronger product control.

The business should record:

the exact product supplied;
brand, model, type, grade or specification;
quantity;
colour or finish;
manufacturer instructions;
known limitations;
maintenance requirements;
suitability assumptions;
warranty position;
whether the customer selected the product;
whether the trader recommended the product;
whether alternatives were offered;
whether the customer chose a cheaper option;
whether the product is suitable for the intended use.

This is not unnecessary paperwork.

It is evidence.

If a complaint arises later, the business will need to show what was supplied, why it was supplied, what the customer was told, and what limitations applied.

A vague invoice saying “materials” may not be enough.

Product Specifications Must Be Incorporated Properly

Product specifications are often central in disputes involving materials.

They can help the business.
They can also hurt the business.

For example, a specification may support the trader by showing that the product required certain maintenance, such as avoiding heavy water exposure, using mats in risk areas, maintaining ventilation, or following cleaning instructions.

But the same specification may support the customer by showing that the product required a particular installation method, expansion gap, adhesive, surface preparation, temperature range, drying time or curing period.

That is why specifications should not be treated casually.

If the business relies on a product specification, it should make sure the customer receives the relevant parts, understands the practical limitations, and confirms any important choices or risks.

The agreement should explain how product specifications form part of the transaction.

It should also explain what happens if the customer refuses to follow the specification or asks the trader to proceed in a way that conflicts with it.

Again, the purpose is not to avoid responsibility.

The purpose is to avoid confusion.

Warranties Must Be Separated Clearly

Another common problem is warranty wording.

A service provider may give a labour warranty.

A manufacturer may give a product warranty.

The customer may think both are the same thing.

They are not.

A labour warranty usually concerns the work carried out by the service provider.

A manufacturer warranty usually concerns the product supplied by the manufacturer, subject to the manufacturer’s own conditions.

A trader may also choose to provide its own additional warranty, but that needs to be drafted carefully.

The agreement should avoid mixing these together.

For example, the business should not simply say:

“Two-year warranty.”

That is too vague.

Two-year warranty for what?
Labour?
Materials?
Replacement parts?
Manufacturer defects?
Installation failure?
Customer misuse?
Wear and tear?
Water damage?
Failure to follow aftercare instructions?

The clearer wording is usually to separate:

labour warranty;
manufacturer warranty;
materials warranty, if any;
exclusions;
maintenance requirements;
what the customer must do to keep the warranty valid;
what happens if the customer uses the goods incorrectly.

This is where many disputes begin.

The customer thinks the warranty covers everything.

The business thinks it only covers labour.

A better agreement should not leave that point open.

Chapter 2 Remedies Can Change the Risk

Chapter 2 of the Consumer Rights Act 2015 gives consumers remedies where goods do not conform to the contract.

This can include the short-term right to reject, repair or replacement, price reduction, or final right to reject, depending on the facts and timing.

This matters because the remedies for goods are not identical to the remedies for services.

A business that only thinks in terms of service remedies may miss the goods-related risk.

For example, if a fitted product fails, the customer may not frame the complaint only as poor workmanship. They may also say the goods were not fit for purpose, not as described, or not of satisfactory quality.

That can widen the dispute.

This is why a business supplying both labour and materials should not use a basic services agreement that ignores Chapter 2.

Product Liability Is a Separate Issue Again

There is another important point.

Consumer Rights Act issues and product liability issues are not always the same.

The Consumer Rights Act 2015 is mainly concerned with the contractual rights between the consumer and the trader. Product liability under the Consumer Protection Act 1987 is a different area, dealing with liability for damage caused by defective products.

This is especially important for businesses that manufacture, import, brand, modify, distribute, or supply products.

A service provider who only thinks about the services agreement may miss wider product-related risk.

For example, if a product is defective and causes personal injury or damage to private property, the legal issue may go beyond whether the service was performed properly.

That is why businesses involved with products should understand the wider product liability framework, not only contract wording.

I explain that separate issue here: https://www.businesslegaladvice.co.uk/post/why-every-product-based-business-should-understand-the-consumer-protection-act-1987

Should One Agreement Cover Labour and Materials?

This is the practical question many business owners ask.

Should labour and materials be covered in one agreement?

The answer depends on the business, the risk, the value of the materials, the type of product, and how much the customer relies on the trader’s advice.

But there is another important question that many businesses miss:

How much is the labour worth, how much are the materials worth, and who carries the cost if the materials fail?

This can become a serious issue.

For example, the materials may be worth £5,000 and the labour may also be worth £5,000. If the customer later complains that the materials are unsuitable, defective, or not what they expected, the dispute is not only about the cost of the materials. It may also become about who pays for the labour to remove them, replace them, refit them, reinstall them, or make good the surrounding work.

That risk can be much larger than the business expected.

A service provider may think:

“I only made a small margin on the materials.”

But if the customer wants the whole job redone, the business may face a claim involving both the product and the labour connected to it.

That is why labour and materials should not be merged casually into one unclear price.

For low-risk materials, one agreement with a clear materials section may be enough.

For more important materials, the better approach may be one main agreement with supporting documents.

For high-value, technical, product-sensitive or safety-related materials, the business may need a clearer separation between the service terms, product terms, manufacturer documents, customer choices, specifications, warranties, and responsibility for replacement labour.

The key point is this:

The structure must match the transaction.

If the business is only providing labour, the agreement should say that.

If the business is supplying materials, the agreement should say what materials are supplied, who selected them, what specification applies, what warranty applies, and what happens if there is a problem with the materials.

If the customer is supplying materials, the agreement should say that clearly and explain what responsibility, if any, the trader accepts for those materials.

If the trader is recommending materials, the agreement should record the recommendation and the assumptions behind it.

If the customer chooses a cheaper or different product against advice, that should be recorded.

Most importantly, the agreement should deal with the cost of labour if the materials fail, are rejected, are unsuitable, or need to be replaced. The business should not leave that question open.

This is not about making the customer journey difficult.

It is about making the legal position clear before the dispute starts.A Legally Sound Structure for Labour and Materials

A better structure should usually answer these questions before work starts:

Who supplies the materials?
Who selected them?
Were they recommended by the trader?
Were alternatives offered?
Are the materials suitable for the intended purpose?
What specification applies?
What installation method is required?
What maintenance or aftercare is required?
What warranty applies to labour?
What warranty applies to materials?
What exclusions apply?
What happens if the customer supplies unsuitable materials?
What happens if the customer refuses recommended materials?
What happens if the customer refuses preparation work?
What happens if manufacturer instructions cannot be followed?
What documents form part of the agreement?
Which document has priority if there is a conflict?

These are practical legal questions.

They should not be left until after the customer complains.

What This Means for Quotes, Invoices and Websites

The materials issue is not only about the written agreement.

It also affects the quote, invoice, website, product description and sales messages.

If your website says you supply “premium materials”, the customer may rely on that.

If your quote says “materials included”, the customer may ask what materials were included.

If your invoice says “supply and fit”, the customer may argue that you were responsible for both the goods and the installation.

If your messages recommend a product, the customer may later say they relied on your recommendation.

That is why the full customer journey matters.

The website, quotation, agreement, product specification, warranty wording, aftercare instructions and invoice should all support the same position.

If they do not, the business may create different versions of the same transaction.

That is dangerous.

So, What Should Business Owners Do?

If your business supplies services and materials to consumers, do not assume that a basic services agreement is enough.

You should review the whole customer journey.

That includes:

your website wording;
your quotation;
your services agreement;
your materials wording;
your product descriptions;
your specification documents;
your warranty wording;
your aftercare instructions;
your variation process;
your customer instruction forms;
your complaint process;
your invoices.

All of these documents should support the same legal position.

If the website says one thing, the quote says another, the agreement says something different, and the product specification creates another layer of obligations, the business is exposed.

The aim is not to create unnecessary paperwork.

The aim is to create legal clarity.

Final Point: Materials Change the Legal Risk

A services agreement is important.

But where materials are supplied, the legal issue may not be limited to services.

Chapter 4 of the Consumer Rights Act 2015 may apply to the service element.

Chapter 2 may apply to the goods element.

Product specifications, manufacturer instructions, customer choices, care requirements, warranties, product descriptions and aftercare documents may all become important.

That is why business owners should be careful before placing materials into a basic services agreement without proper structure.

The agreement should not simply say what the business is doing.

It should explain what the business is supplying, what the customer has chosen, what product information applies, what limitations exist, what warranties apply, and what evidence will prove the position later.

That is the difference between a document that looks professional and a legal structure that actually protects the business.

If your business provides services and materials to consumers, Business Legal Advice can help you review your documents, identify the legal gaps, and prepare a structure that reflects the way your business actually works.

You can request a free consultation here: https://www.businesslegaladvice.co.uk/