Supply of goods and services agreement templates

The Supply of Goods and Services Act 1982 governs contracts where a business provides goods and services. It says that anyone providing a service must do so with reasonable care and skill, within a reasonable time, and for a reasonable charge if no price is agreed in advance.

When goods are supplied as part of a service — for example, parts used during a repair — those goods must be of satisfactory quality, fit for purpose, and as described. These terms are implied into most contracts by law, even if they aren’t written down.

The Act applies mainly to contracts between businesses or where services are provided by a business, not by private individuals.

Since 1 October 2015, most consumer contracts are now covered by the Consumer Rights Act 2015, which replaces much of the earlier law for individuals. However, the 1982 Act still applies to business-to-business contracts, and its rules continue to protect buyers in those situations.

Not always — but it depends on what you’re supplying. If you provide only goods or only services, a single, focused contract is usually best. It helps keep things clear and makes sure the right legal terms apply.

If you supply both goods and services together — for example, selling equipment and installing it — then your contract should cover both elements. You can do this in one combined agreement, or by using two linked contracts.

The key is to make sure the contract sets out clear terms for both parts of the deal. For goods, that includes things like delivery, quality, and when ownership passes. For services, you’ll want to cover timing, standards of work, and any performance obligations.

If you mix the two but only use a service contract or a sales contract, there’s a risk of missing important protections — or creating confusion if there’s a dispute.

In business-to-business contracts, there’s flexibility. But using the right structure from the start saves time, avoids problems, and helps protect your position.

A business may prefer to use a standalone contract for the sale of goods or supply of services rather than relying on standard Terms and Conditions.

Standalone contracts reduce uncertainty around:

• which party’s standard terms might otherwise apply  
• whether standard terms have been properly incorporated into the agreement 
• the “battle of the forms” (each party seeking to impose its own terms)  
• whether limitation or exclusion clauses in standard terms are enforceable  

These issues can lead to confusion and costly disagreement. A standalone contract sets out clear, agreed terms tailored to the transaction, minimising the risk of later disputes.

This approach also suits businesses that only occasionally sell goods or provide services. In such cases, it may be simpler and more cost-effective to use a contract specific to the situation, rather than maintaining general terms and conditions.

Standalone contracts offer more control, help manage risk and provide flexibility in tailoring terms to individual customers or deals.  

Further guidance on the benefits and limitations of standard Terms and Conditions is available in our dedicated section on this topic.

Implied terms are provisions that apply to a contract even if they aren’t written down. They complement the express terms agreed between the parties.

These terms can arise from:

• statute, including:  
• sale of Goods Act 1979  
• supply of Goods and Services Act 1982  
• unfair Contract Terms Act 1977  
• common law, based on fairness or necessity  
• custom or trade usage  
• previous dealings between the parties  
• what the parties likely intended, but didn’t state  

Implied terms often cover matters such as the quality of goods, their fitness for purpose, reasonable care and skill in service delivery, and performance timescales.

In business-to-business (B2B) contracts, statutory implied terms are particularly important. However, the law allows many of them to be excluded or limited—provided this is done clearly and in accordance with the Unfair Contract Terms Act.

Our contract templates are supported by detailed guidance notes explaining how implied terms apply in context. They also highlight when and how exclusions may be used, helping businesses manage legal risk effectively while complying with relevant legislation.

In commercial supply contracts, it’s common for parties to include specific wording that limits or excludes liability if things go wrong. These clauses can help protect one or both parties from certain financial or legal consequences if there’s a breach of contract — for example, if the goods delivered are defective or services aren’t performed as agreed.

Exclusion and limitation clauses might, for instance, cap the maximum amount a supplier must pay if the customer suffers a loss, or exclude liability for certain types of loss altogether. They may also seek to limit responsibility for breaches of terms that are implied by law, such as goods being of satisfactory quality or services being carried out with reasonable care and skill.

However, such clauses must be carefully drafted to be legally enforceable, particularly in contracts governed by English law. The courts will examine whether a clause is clear, reasonable, and properly included in the agreement.

Under English law, the use of exclusion and limitation clauses in supply contracts is restricted by both case law and legislation — most notably the Unfair Contract Terms Act 1977 (UCTA).

In business-to-business contracts:

• Liability for death or personal injury caused by negligence cannot be excluded  
• Other losses caused by negligence (like property damage or financial loss) can only be limited if the clause passes the UCTA reasonableness test  
• Some implied terms, such as the seller’s right to sell the goods (under the Sale of Goods Act 1979), cannot be excluded  
• Other implied terms — for example, those relating to quality or fitness for purpose — can only be limited if doing so is reasonable under UCTA  

To be enforceable, the clause must also have been clearly brought to the other party’s attention before or at the time of contracting. Courts will consider how the clause was presented, any prior dealings between the parties, and whether it aligns with standard practices in the relevant industry.