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Selling and marketing

Supply of services

Contents:

Introduction

Terms implied by law

Provision of Services Regulations

Introduction

The supply of services as distinct from the sale of gods has until relatively recently not been much regulated by the law. It has been up to the supplier and the recipient of the services to specify the relevant terms of the supply in the contract.

In the absence of specific terms in a contract, certain basic terms are implied in the contract.

Use a contract: generally you will be well advised to supply services only under a carefully drafted contract.

Recently, EU legislation has required member states to bring in regulations which require service providers to provide customers with certain information and comply with other obligations. These are described in the section dealing with the Provision of Services Regulations.

For the law relating to supply of services to a consumer, see Sale of goods and services to consumers

Further reading: for guidance on the Provision  of Services Regulations, see the BIS guide

Terms implied by the law – supply of services (EW, NI; equivalent provisions for Scotland)

In the absence of any specific contract term, the following basic terms are implied into the contract by the Supply of Goods and Services Act 1982 (SGSA):


* Standard of service: in a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill (SGSA s.13 ).

* Time for performance: under a contract for the supply of a service by a supplier acting in the course of a business, there is an implied term that the supplier will carry out the service within a reasonable time (SGSA s.14).

* Price: there is an implied term that the party contracting with the supplier will pay a reasonable charge (SGSA s.15).

The law specifically states (although it probably did not need to do so) that terms covering the above matters may be determined in a manner agreed by the contract or by the course of dealing between the parties (SGSA s.16).

Provision of Services Regulations

Introduction

The Provision of Services Regulations 2009 (“PSR”) were made in order to implement in the UK Directive 2006/123/EC of the European Parliament and of the Council on services in the internal market (OJ No. L 376, 27.12.2006, p.36) (“the Directive”).

Supplying to other EEA states: one purpose of the Directive was to make it easier for a service provider from one EEA member state to provide services in another. The EEA comprises the EU states plus Liechtenstein, Iceland and Norway. The Directive requires all member states to provide a single online point of contact for businesses to apply for authorisations and licences - see: Points of Single Contact. In the UK, this contact point is provided by UK Welcomes

https://www.gov.uk/ukwelcomes.

The other purpose of the Directive is to require service providers to give recipients certain minimum information about the provider and the service, and access to a complaint procedure.

Application of PSR to consumer and business customers

The PSR apply both to consumer and business recipients. However it appears that enforcement measures are only available in the case of consumers, and in the case of business customers, there are no sanctions for non-compliance (see below).

If you sell only to business customers, you may take the view that there is no need to comply  There are reasons, however, why you may as well comply unless there is good reason not to:


* it is not always possible to preclude the occasional sale to a consumer;


* it is good practice to provide the required information anyway.

The PSR overlap with the E-commerce Regulations and the Distance Selling Regulations. If you are using e-commerce to market or sell goods or services via a website or otherwise, you may need to comply with the E-commerce Regulations.


If you are selling goods or services to consumer customers not present, i.e. by mail order or telephone as well as via a website or other electronic means, you will need to comply with the Distance Selling Regulations.

Services covered by the PSR

'Service' is broadly defined and means any self-employed economic activity normally provided for remuneration. The preamble of the Directive states that it covers business services such as management consultancy, certification and testing; facilities management, including office maintenance; advertising; recruitment services; and the services of commercial agents.

The services covered are services provided both to businesses and to consumers, such as legal or “fiscal” [i.e. accounting and tax] advice; real estate services such as estate agencies; construction, including the services of architects; distributive trades; the organisation of trade fairs; car rental; and travel agencies.

Consumer services are also covered, such as those in the field of tourism, including tour guides; leisure services, sports centres and amusement parks; and, to the extent that they are not excluded from the scope of application of the Directive, household support services, such as help for the elderly. Those activities may involve services requiring the proximity of provider and recipient, services requiring travel by the recipient or the provider and services which may be provided at a distance, including via the internet.

Excluded services: certain services are excluded from the definition (see PSR reg.2(2) for detail):


(a) financial services, such as banking, credit, insurance and re-insurance, pensions, securities, investment funds, payment and investment advice;


(b) electronic communications services and networks, and associated facilities and services;


(c)  services in the field of transport, including port services; including air transport, maritime and inland waterways transport, including port services;
[Note: the official BIS guidance comments that, as well as road and rail transport, in particular urban transport, taxis and ambulances are within this exemption. Examples of services which are not covered by this exclusion (i.e. are in scope of the Regulations) are removal services, car rental services, driving instructors, MOT service centres, funeral services and aerial photography services. Neither does the exclusion extend to commercial activities in ports such as shops and restaurants.]


(d) services of temporary work;


(e) health care services;


(f) audiovisual services, including cinemas and broadcast services;


(g) gambling activities, including lotteries, gambling in casinos and betting transactions;


(h) activities which are connected with the exercise of official authority (as set out in Article 45 of the Treaty);


(i) social services relating to social housing, childcare and support of families and persons permanently or temporarily in need which are provided by the State, by providers mandated by the State or by charities recognised as such by the State;


(j) private security services;


(k) services provided by notaries or bailiffs, if or to the extent that they are appointed by an official act of government to provide those services.

Non-profit making activities: the Directive’s preamble states that non-profit making amateur sporting activities are of considerable social importance and often pursue wholly social or recreational objectives. Such activities should fall outside the scope of the Directive as they might not constitute economic activities within the meaning of EU law.


Legaleze comment: this reasoning should apply to other non-profit making activities of a social nature.

Goods
Legaleze comment: the PSR do not affect the manufacture or sale of goods. But there are many ancillary services relating to goods, such as some aspects of retail, maintenance, or after-sales services to which these regulations could apply. In the guidance, the Government expressed the view that retail premises will generally be providing a service where activity is not exclusively concerned with the sale of goods; for example, where they also provide after-sales service or customer advice. There are also some cases where an activity may comprise a service only where carried out independently; for example, car spray painting is not a service where it forms part of the production of cars, but it is where it is provided independently as part of a car repair business.

Information to be given

The information must be given in a clear and unambiguous manner. Specified basic information must be given in good time before the conclusion of the contract.  Other information must be given on request or, where there is no written contract, before the service is provided (unless the information is requested as specified        in regulation 9 after the provision).

Required basic information:


* Specified contact details to which all recipients of the service can send a complaint or a request for information about the service;


* The provider's name;


* The provider's legal status and form;


* The geographic address at which the provider is established and details by which the provider may be contacted rapidly and communicated with directly;


* If the provider is registered in a trade or other similar public register, the name of the register and the provider's registration number or equivalent means of identification in that register;

Legaleze comment: this refers to an official register rather than a trade directory. For example, For example if your business is registered with the [“Gas Safe Register”] this should be stated along with the registration number.


* Where the activity is subject to an authorisation scheme in the United Kingdom, the particulars of the relevant competent authority;
Legaleze comment: the competent authority may be a government department, official regulator or a private body such as Capita Gas Registration and Ancillary Services Limited which runs the Gas Safe Register;


* VAT number where the provider exercises an activity which is subject to VAT;


* Where the provider is carrying on a regulated profession, any professional body or similar institution with which the provider is registered, the professional title and the EEA state in which that title has been granted;


* The general terms and conditions, if any, used by the provider;


* The existence of contractual terms, if any, used by the provider concerning the competent courts or the law applicable to the contract;


* The existence of any after-sales guarantee not imposed by law;


* The price of the service, where a price is pre-determined by the provider for a given type of service;


* The main features of the service, if not already apparent from the context;


* Where the provider is subject to a requirement to hold any professional liability insurance or guarantee, information about the insurance or guarantee;


* If the provider is subject to a code of conduct, or is a member of a trade association or professional body, which provides for recourse to a non-judicial dispute resolution procedure, the existence of the service and how to access detailed information about the procedure.

Information to be given on request:


* Where the price is not pre-determined by the provider for a given type of service, the price of the service, or if an exact price cannot be given, the method for calculating the price so that it can be checked by the recipient, or a sufficiently detailed estimate


* Where the provider is carrying on a regulated profession, a reference to the professional rules applicable in the EEA state in which the provider is established and how to access them;


* Information on other activities undertaken by the provider which are directly linked to the service in question and on the measures taken to avoid conflicts of interest;


* Any codes of conduct to which the provider is subject and the address at which these codes may be consulted by electronic means, specifying the language available.

Complaints


The provider of a service must respond to complaints from recipients of the service as quickly as possible, and make his best efforts to find a satisfactory solution to complaints from such recipients. This does not apply to “vexatious” complaints.

Discrimination by residence


The provider of a service may not, in the general conditions of access to a service which the provider makes available to the public at large, include discriminatory provisions relating to the place of residence of recipients who are individuals. Excepted from this are differences in conditions of access which are directly justified by objective criteria.

Enforcement

Civil enforcement: the Office of Fair Trading (OFT) and local weights and measures authorities have power to take action against breaches where this harms the “collective interests of consumers”.


Legaleze comment: It seems unlikely that an individual recipient of services could bring a legal action against the service provider arising out of alleged loss caused by the provider’s breach of the PSR. This is because the OFT have a specific power to take action on behalf of consumers, and the regulations do not give any other specific remedies (see Norwich Union Life Insurance Society v Qureshi [1999] 2 All ER (Comm) 707, [1999] CLC 1963, CA.)

Criminal enforcement: there are no criminal penalties.

[Page updated: 18/06/2015]

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