I'm paying US$800 in labor for a mechanic to replace a blown engine with a used one I purchased. Should changing gaskets be his responsibility?
I will be paying for the gaskets.
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The Mechanic is providing "Labour" only unless you have otherwise agreed on some other arrangement which I doubt any Mechanic who wants to actually make a profit would do. A Mechanic will not often provide expensive parts Gratis. Your Mechanic will install your engine and guarantee his work based on the parts "You" supplied but you will need to buy superfluous parts such as Manifold gaskets, Tranny Gaskets, Spark Plugs, Various Filters, Injectors if needed, etc.. Edit: I just noticed your edit and yes if you have supplied and paid for all necessary Gaskets, etc. needed, then YES he should install them as part of the deal at no extra cost to you. I would have to question his professionalism and Sanity should he neglect to do so!!!