If a contract calls for both rendering services and supplying materials to be used in performing the services, the contract is classified according to its dominant element.

Question

Quizplus · Accepted Answer

The contract will be classified based on its dominant element, which is the activity that carries more weight or value in the transaction. In this case, if the provision of services is more significant than the supply of materials, the contract will be treated as a service contract. Conversely, if the supply of materials is more substantial, the contract will be regarded as a contract for the sale of goods.

If a Contract Calls for Both Rendering Services and Supplying