013 - Preparing a Timber Sale Contract
A Contract is Good Business
You woudn’t sell a house without a contract – a timber sale needs a contract, too. Timber is a valuable commodity. If you are a private landowner planning to sell timber, make sure you protect your interests, and those of the purchaser, by using a written contract. Often, timber is sold by a handshake or a “gentleman’s agreement” and sometimes misunderstandings or problems with sales have ended up in the courts. A comprehensive contract will help make the sale and harvest run more smoothly, with less surprises for seller or purchaser.
Before you sell your timber, make sure you know what you have and what it is worth. Consultation with a professional forester will help you determine the value of your trees, and help you plan the harvest to attain the goals you have for your land. A forester can also be hired as seller’s agent and administer the timber sale contract from start to fi nish – from valuation to logging completion and site cleanup. Working with a professional forester is recommended, but if you choose to administer the sale yourself, refer to Utah Forest Facts NR/FF/006, “Tips for Planning a Successful Timber Sale,” for information on how to prepare and carry out your sale. How your timber sale is carried out not only determines your fi nancial success, but it also can mean the difference between a healthy forest and one that is severely damaged and will take decades to recover.
A timber sale contract does not have to be overly long with complicated legal language, but it must clearly lay out expectations for both purchaser and seller. If a timber purchaser has approached you to buy your timber, they may present a purchaser’s contract. It may be all right to use a purchaserprepared contract, but review it with an attorney fi rst to make sure your interests are protected. Chances are that clauses will need to be added and other changes made so the contract addresses both of your interests.
A Sample Contract
A sample timber sale contract is presented. This document is set up for you to “cut and paste” to create your own contract. Be sure to include essential clauses which should appear as a minimum in any timber sale contract. In the sample contract, these essential clauses are: 1, 2, 5, 6, 7, 8, 9, 14, 15, 16, 17, 18, 28, 35, 37, 38, 39, 42, 43, and 45. Include other clauses if they are important to your sale, but omit provisions within a clause if they do not pertain to your sale. Also, the explanatory paragraphs (shaded) should be removed – they are there to provide more information about certain clauses. The remaining paragraphs will need to be renumbered if some clauses are excluded.
Be aware that too many restrictions may reduce the price you will receive for your timber or the willingness of purchasers to bid on it. Consult an attorney before signing any timber sale contract.
Acknowledgements
Robert D. Barclay, Assistant Attorney General assigned to Utah State University, provided a thorough review of the sample contract. Partial support for this publication comes from USDA Forest Service State and Private Forestry.
Sources
Some clauses included in the sample timber sale contract came from existing contracts. Primary sources for material include: George Bacon, Idaho Department of Lands; Richard Brinker and Charles Raper, Alabama Cooperative Extension System; Wayne Clatterbuck and Larry Tankersley, Tennessee Agricultural Extension Service; Rick Hamilton, formerly University of Nebraska-Lincoln Cooperative Extension; John Szydizik and John Gunter, Michigan State University; Steve Wilent, Society of American Foresters; and University of Wisconsin Extension.
Published November 2005.