When I first started horse logging the last thing on my mind was what to put
in a contract. All I thought about was how great it was to get money to work
with my horses. But a handshake no longer carries the same value it once did,
and the more involved I got, the more complicated things seemed.
Each contract I write is different from the last. I try to make clear that I
understand the needs of the landowner and that he understands what my
responsibilities are. The following principles may be as helpful to you as they
have been to me in making a contract:
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A contract needs a starting date and a completion date. You must make clear
how much time you need to finish the work. |
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Set up goals and objectives with the landowner. The goal is what the
landowner wants the end product of your service to be. The objectives are how
you're going to get there. What does he want out of his stand of timber? Does he
want to cash out on the land, manage for wildlife, manage for a specific species
of tree, or do a thinning of low-grade trees to improve growth of the remaining
trees? |
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Be clear about who is buying the timber from the landowner. Are you buying
the standing timber? Are you acting as a broker and selling it for the
landowner? Or is a mill buying the timber and you are working for the mill? Make
this clear so when a truck comes to pick up the logs, the landowner knows
exactly what's going on. |
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The contract must include a legal description of the land. Walk the sale
with the landowner and have him clearly mark the boundaries with ribbon or paintpaint
is better, since ribbons can easily be removed. |
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Be clear about what species will be harvested and what price will be paid
for each species. Explain the grading system to the landowner: Logs are divided
into four gradesveneer, number one, number two, and number three. Each
grade has a different value. |
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Explain how you are going to scale the logs. Which scale [chart that
calculates the number of board feet in a log] will you use: Doyle, Scribner C,
or International? On small-diameter logs Doyle is about 10% less than Scribner
C, and is not legal in all states. International is used for export logs. |
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I like to take the landowner out in the woods to grade and scale a few
standing trees. Learning to look at trees and place a value on them helps him
get a better perspective on his woodlot. The more you educate the landowner, the
fewer problems you will have working together. |
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Include in the contract what your responsibilities are and how you are
going to accomplish them. Who is going to pick the trees to be harvested, you or
the landowner? I like to take the time to walk through the sale with the
landowner and tell him why I would select one tree over another, then give him
the paint can and let him mark the trees. When he marks the trees, it won't be
your fault if it turns out that a tree you cut was one of those planted by Great
Grandad. |
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Be clear that you are going to use horses for most of the job. If you will
use a tractor or skidder for anything, state specifically what you will use it
for. I, for example, leave a tractor on the landing for loading logs. Do not be
tempted to use a tractor for logging if you said you were going to horse log. |
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Specify who is responsible for the cost of hauling the logsthe
landowner, the logger, or the mill. |
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Lay out the landowner's expectations. For example, does he expect you to
provide access to the site, or will that be his responsibility? |
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It's a good idea to state that you have the right to subcontract to another
horse logger, provided the landowner gives written approval of the person you
pick. While you have to be careful about farming out worksince you're
putting your reputation on the lineif you follow my mistakes and bite of
more than you can chew, you may need help getting caught up. Having someone in
the woods with you is also safer. |
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The landowner is not responsible for any injuries that may occur to the
logger or anyone affiliated with the logger. The landowner is, however,
responsible for injuries that may occur to anyone else on the property who is
not affiliated with the logging operation.
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Decide what you are going to do with the slash, or the tree tops that will
not make logs. How far down to the ground are will you cut the tops? Will you
take fire wood or leave it? Most people don't realize how much slash is left. If
you don't deal with the issue ahead of time you'll have a problem if the woodlot
looks like a war zone when you're done. |
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Explain what you're willing to do if you make a mistake and cut down the
wrong tree. It can happen. I put in a clause saying that if any tree not
designated to be cut gets cut down, I am willing to pay three times the value of
the standing tree. This clause accomplishes two things: It makes you pay
attention to what you're cutting and it puts a cap on the amount you have to pay
for a mistake. |
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Either the landowner or the logger can call a halt to logging due to bad
weather, poor soil conditions, or injury. The contract should make provisions in
the event you get injured and cannot complete the contract within its time
frame. |
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Give the landowner an out, which also gives you an out should you need one.
If the landowner is not satisfied with your work, he should be able to dismiss
you without a breach of contract. You need to protect yourself, however, so you
don't have 30,000 board feet of logs on the landing when the landowner decides
you're not doing a good job, fires you, and sells the logs himself. |
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I put in a clause stating that if the landowner is not satisfied with my
work, he will allow me to market the logs I have on the ground or he will pay me
at the rate of $.25 per board foot for the logs on the ground. If he decides he
wants to pay at that rate, it's a pretty good logging income. |
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But if it comes to this, it will cost a lot in lost reputation. In business
reputation is money, so if at all possible avoid such a situation. I usually try
to defuse a problem by asking the landowner what I can do to make it right with
him. Do not get confrontational. Follow the saying, "The customer is always
right," and try to work through it. |
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Specify that the landowner has full title to the timber. Make sure there
are no hidden owners. I once had a contract ready to sign when I found out the
person had a brother in Germany who was part owner in the property. That stopped
everything until we could get the brother's signature. Liens on the property may
affect your contract, too. |
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Specify a set amount for the deposit on the sale. This binds the contract. |
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Have all parties sign, date their signatures, and give their social
security numbers on the contract. If you purchase standing timber, send the
owner a 1099 form at the end of the year. |
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After you chicken scratch all this out, take it to a lawyer and have him
tell you all the things I missed. |
Contracts have become a necessary evil of businessyou have to deal
with them if you're serious about horse logging.