I don't sit behind anybody's desk but my own and have been self employed for over 25 years. I agree that management of client expectations is absolutely critical for a business of any size but is more important to a small business. I'm a Headhunter and supply IT Professionals to businesses that pay me a hefty fee to find the right people for them.
That said, I have, on various occasions, replaced a person that didn't work out, was not my fault and the contract was clearly on my side. I didn't get paid for the extra work and/or expense. I remember the John Wayne movie and the "My fault, your fault, nobodys fault at all". Even though I performed to the best of my ability and did everything right, the customer didn't get what he paid for. No matter what the contract says, my reputation is at risk and I take that very personally. It's a smaller world out there than I used to think it was and I've gotten a lot of business from referrals.
In Eric's case, it sounds like the applicator blew it. I'm not going to go into whether he sprayed the right stuff or did it right. That's more you guys field than mine.
Think it over.