A good timber sale contract is necessary to avoid potential misunderstanding and conflicts in the future. Essentially, a good contract should be written and will address four main issues:

1. Timber being sold
2. Terms and price
3. Limitations on the logging operation
4. Measures for protection of your property

The contract should very clearly explain which timber is being sold, as well as which is NOT being sold. The contract should specify the price being paid for the timber and exactly when and how you will be paid. The contract should indicate measures for the protection of any timber you are not selling and clearly describe how you want to protect important resources such as soil, streams, lakes, and wildlife habitat. Every person buying or selling timber should formalize the terms of the agreement in a timber sale contract. Essential terms of that contract include:

1. The names and addresses of the parties to the contract.
2. If one or more of the parties is out of state, specify which state will govern the contract.
3. The legal description of the land on which the timber is located. This information can be obtained from a warranty deed or determined from a plat book.
4. A description of the timber to be sold (e.g. species, product, volume, etc.) A statement of how boundaries are marked, and how trees that are to be harvested are marked.
5. A statement verifying that the seller is the legal owner of the timber.
6. The purchase price and method or schedule of payment.
7. Specify the down payment to be made by the purchaser at the time the contract is signed. A down payment of 10-20 percent is common.
8. The time period during which the work defined within the contract is to be performed. The seller would have an understanding of how long it will take to harvest the timber. The contract should indicate whether the contract can be renewed or extended, and the cost of doing so. Upon expiration of the time period, the contract should provide that it is null and void, unless a written extension is granted by the seller.
9. Provisions for protecting soil, water, and other important forest resources. The logger should comply with the Volunteer Site-Level Forest Management Guidelines for Landowners, Loggers and Resource Managers commonly called the “guidelines” by indicating within the contract the specific guidelines that need to be applied.
10. Evidence that the logger carries workman’s compensation insurance for all members of the logging crew and has adequate liability insurance.
11. The agreement should specify penalties to be paid to the seller if the purchaser cuts undesignated trees or damages residual trees, or does not comply with forest management guidelines.
12. There should be a provision that the seller may suspend operations, including the removal of cut timber, if conditions of the contract are violated by the purchaser. The provision should also state that violation of the terms or conditions of the contract are sufficient grounds for termination of
the contract.
13. A provision that makes modifications or amendments to the contract must be in writing and signed by all parties.
14. Establishment and administration of a performance bond to be posted by the purchaser prior to commencing harvesting operations.

Methods of Payment
1. Sell the timber as a “lump-sum” amount (i.e. the buyer pays one price, based on the estimated volume of timber).
2. Sell the timber by “consumer scale,” which means the purchaser would have the wood scaled by a third party to determine its quantity. If the consumer scale method is used, the contract should specify the amount to be paid per unit (board feet or cords) for each species (aspen, red pine, jack pine, etc.) and the type (sawtimber or pulpwood).

Regardless of the type of payment, you should get competitive bids to assure that the buyer is paying a fair price for the timber.

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