NC State Extension Publications

Sample Timber Sale Contract

The following example of a timber sale contract is provided for educational purposes and to remind sellers of the importance of a legal contract for selling timber – a real property asset when sold in standing condition. When selling a valuable asset, like timber, always know what you are selling and seek professional advice to ensure that you receive fair market value, are improving the future condition of your woodlands and have the proper legal and tax advice to ensure that your tax bill is correct and adequate protections are in place.

For more information please see the extension publications on Timber Sale Contracts available on the Extension Forestry website.

STATE OF NORTH CAROLINA

COUNTY OF ___________ TIMBER SALE CONTRACT

THIS TIMBER SALE CONTRACT (Contract) is made the ______ day of ______, 20__ (Effective Date) between _____________ Logging Company, Inc., _______, _________, NC ______ (Buyer) and _________________ (Seller).

WHEREAS, Seller desires to grant to Buyer, and Buyer desires to acquire from Seller, the right and obligation to cut the timber described in this contract, and

WHEREAS, the parties intend to create a bilateral contract for the sale of timber, and not an option to purchase timber,

THEREFORE, the parties agree as follows:

  1. Purchase and Sale of Timber: Buyer shall purchase from Sellers and Sellers shall sell to Buyer certain standing timber (Timber) situated on the property described below.
  2. Property Description: The timber subject to this contract is situated on a portion of a tract identified as _________________ County, NC tax parcel #___________________ containing approximately ______ acres in the sale area (Property). The Property is shown as Stand 1 on the timber map prepared by ___________________ which is attached as Exhibit A and is hereby incorporated by reference, and is more particularly described in Deed Book ____, Page _____, ______________ County Register of Deeds.
  3. Duration of Contract: Buyer is granted until ____________, 20__ to enter, harvest and remove the timber.
  4. Description of Harvest: This is a clear-cut harvesting operation and all of the merchantable trees including the top wood shall be cut and removed in the sale area as shown on the map shown in Exhibit “A”. A large portion of this sale will be to remove the trees on the existing ditches or intermittent streams. BMP’s are to be expressly followed to make sure the ditches and streams are not block with tops. Tops and other debris should be piled in the sale area and not be left in the adjacent farm fields or ditches.
  5. Performance Bond: Buyer agrees to post a $ ____________________ performance bond with ______________________________ Escrow Account at the signing of this contract. The bond shall be forfeited in part or in whole upon the basis of a final logging inspection by Consultant. The amount of the bond in no way limits Buyer's liability for damages. Buyer forfeits this bond if it does not harvest the timber within the effective dates of this contract.
  6. Advanced Deposit: Buyer agrees to pay a $­­­­ ______________advanced deposit to the _____________________, Escrow Account at the signing of this contract. This advance shall be credited to the Buyer at the end of the logging operation on the last weekly settlement. Buyer forfeits this advance deposit if it does not harvest the timber within the effective dates of this contract.
  7. Payment

  1. Buyer shall pay Sellers the following prices for all timber harvested:

Pine Pulpwood @ $ --- per ton

Pine Chip-n-Saw @ $ --- per ton

Pine Sawtimber @ $ --- per ton

Hardwood Pulpwood @ $ --- per ton

Red Oak Sawtimber @ $ --- per ton

Sweetgum Sawtimber @ $ --- per ton

Hardwood Miscellaneous Sawtimber @ $ --- per ton

  1. Payment is to be made weekly. Along with payment, Buyer shall furnish Seller a statement showing the volume of wood by weight and type removed from the property.
  2. Buyer shall mail settlement checks payable to Escrow Account. Buyer shall send payments, stumpage statements, and the Daily Load Sheets each week to the following address:
  3. The net weekly settlements, after commissions to ________________, will be paid to ______________ from the _________________ Escrow Account.
  4. Prompt payment is the essence of this Contract. Should the Buyer fail to make prompt payment, Seller has the right to terminate the contract.

8. Security Log: Buyer agrees to maintain a Daily Load Sheet, shown as Exhibit “B,” provided by seller or their agent, and keep it at the harvest site at all times. Buyer shall number each load of timber consecutively, i.e.; no loads will have the same number. The load number, type of forest product, destination, date and time of hauling will be recorded in the logbook by the Buyer before each load leaves the Seller’s property. Upon the return of the truck, the Buyer will record the weight of the load and the scale ticket number. The load number will also be printed on each scale ticket and a copy of the scale tickets will accompany each week’s payment.

9. Damages: If Buyer cuts or unnecessarily damages trees not included in this sale, Buyer shall pay for those trees at double the stumpage rates set out in paragraph 7 of this contract.

10. Notice: Buyer agrees to notify _________________________ 36 hours before beginning of logging operations. Seller or their agent reserves the right to view harvesting operations to verify compliance with the terms of this Contract. Buyer agrees to promptly report the completion of cutting on the Property and to remove all equipment from the Premises within thirty (30) days after completion of harvesting.​

11. Boundary Lines: Boundary lines have been plainly marked in blue or yellow paint on the ground by and Seller guarantee them to be accurate as shown to Buyer.

12. Access: Buyer and its agents shall have access across the sale area and any adjacent property of Seller for the purpose of cutting, removing and transporting the Timber.

13. Roads: Buyer shall keep all roads in the sale area or other property of the Sellers in a passable condition during the harvesting operations and restore them to their former condition at the Buyer’s expense upon completion of logging operations.

14. Decking: All decking and skidding must take place within the timber sale area. Buyer has the right to construct a reasonable number of skid trails and logging decks, provided that the location and extent are approved in advance by . Buyer shall use existing trails when reasonably possible.

15. Best Management Practices & Forest Practice Guideline: Buyer agrees to harvest the Timber in accordance with North Carolina Forest Practices Guidelines related to Water Quality and the NC Forestry Best Management Practices Manual so that the Forestry exemption under the N.C. Sedimentation Pollution Control Act of 1973 remains in effect.

16. Right to Halt Logging: Buyer, its agents, employees, and assigns, shall minimize soil damage which may result from operating logging machinery during wet ground conditions. Seller reserves the right to suspend logging operations if, in seller or their agent’s sole opinion, conducting said logging operations during periods of wet weather and/or high soil moisture will result in excessive damage to the soils and roads of the Property. If logging is stopped due to wet weather, the expiration date of this contract will be extended by the number of days logging was prohibited.

17. Trash and Debris: No debris of any type shall be left on the property except for natural trees and brush that originated on the land. No trees, limbs, brush or other debris shall be left across property boundaries, or in any fields, streams or ditches on the property. Buyer shall refrain from depositing any petroleum or hazardous wastes on the premises. Grantee or its agents shall at all times keep trash contained within garbage bags or cans. No trash, including, but not limited to cans, bottles, paper, plastic, and towels, on shall be left on the ground at any time. At the completion of timber harvesting, Buyer or its agents shall be responsible for removal of all trash from the cutting area, including, but not limited to oil cans, paper, tires, plastic, or glass bottles or other debris, placed on the cutting area by Buyer or its agents. No trash shall be buried on this site.

18. Government Restrictions: If any condition exists on the property on or before the Effective Date, which restricts Buyer’s ability to harvest and remove the Timber due to any government rule, ordinance, law or regulation, or any threatened action from a federal, state, or local governmental agency: (1) If this is a per unit sale, the restricted timber shall be excluded from the sale; and (2) if this is a lump sum sale, Seller shall, within 30 days after written request, reimburse Buyer for the timber located within the restricted area at the fair market value of the timber on the date of purchase.

19. Fire Hazards: Buyer and its employees shall at all times exercise reasonable care to minimize and reduce the hazard of fire by the use of good forestry practices. No open fires shall be allowed on this site.

20. Fences: Buyer and its agents shall not damage any fences on the property, and shall restore any damaged fences at Buyer’s expense to the condition they were in prior to logging.

21. Damage to Improvements. Buyer shall pay the actual cost for repair of damages caused by its agents’ employees, and assigns’ logging operations to gates, fences, ditches, bridges, roads, cattle guards, culverts, crops, or other improvements on the premises, except for roads, which are the responsibility of the Seller.

22. Damage to Property Markers. Any property corners or monuments that are altered, removed or damaged shall be replaced by a licensed surveyor at Buyer’s expense.

23. Letter of Release. Buyer shall furnish a letter of release within ten (10) days of completion of logging should the harvesting operation be completed prior to the expiration of the Contract.

24. Indemnity: Buyer shall indemnify and hold Sellers harmless from any and all liability and any and all loss, including attorney's fees and other related and reasonable expenses incurred, arising from the operations, activities or loss caused by acts or omissions of Buyer's employees, contractors, subcontractors, or employees of contractors or subcontractors, and any invitees, and whether such liability or loss be to an adjoining landowner or to said employees, contractors, subcontractors, employees of contractors or subcontractors, or licensees of Buyer or to any others for property damage, personal injury, death or otherwise.

25. Insurance: Buyer agrees to maintain worker's compensation insurance and adequate liability insurance to fully protect Sellers from any liability whatsoever, and will furnish evidence of such insurance upon request of Sellers or their agents.

26. Safety Regulations: Buyer shall abide by all occupational safety and health requirements and all other applicable state or federal laws.

27. Exclusion of Warranties: Buyer and Seller exclude the implied warranties of merchantability and fitness for a particular purpose from this transaction.

28. Express Warranty of Good & Clean Title: Seller warrants that he conveys good and rightful title and that the Timber is free from any security interest or other lien or encumbrance in which Seller, at the time of contracting, has knowledge. Seller shall defend and indemnify Buyer against all lawful claims or other encumbrances. The remedies for breach of this section are the same as remedies for breach of N.C. Gen. Stat. § 25-2-312.

29. Express Warranty of Merchantability: Seller warrants that the Timber conforms to the description in this contract and knows of no defects that would keep it from being sold as the products specified in paragraph 26 of this contract. The remedies for breach of this section are the same as the remedies for breach of N.C. Gen. Stat. § 25-2-314.

30. Default: Should Buyer violate any of the terms and conditions of this Contract and fail to remedy the situation to the satisfaction of the seller or their agent after notice and demand for remedy, Seller may declare this Contract to be in default and, at the Seller’s option, (1) compel specific performance of this Contract; (2) suspend harvest operations until default has been remedied, or (3) cancel the Contract and seek other forms of relief available by law and/or equity.

31. Assignment: Buyer may not assign this contract in whole or in part without consent of seller or their agent secured in advance, and in the event of any such assignment Buyer will not be relieved of its duties hereunder unless such release is specifically given by seller or their agent in writing. Any attempt by Buyer to assign this contract will relieve Sellers of all obligations under this contract. Buyer may contract or subcontract the cutting, logging, hauling, and removal of the Timber without the written consent of the Sellers’ Agent, but by doing so will not be relieved of any obligation under this contract. Buyer may not sell or assign any rights to any other person or entity to cut, saw, or remove any of the Timber as firewood.

32. Risk of Loss: Risk of loss to the Timber shall remain upon Seller until severed.

33. Entire Agreement: This Contract signed by both parties constitutes a final written expression of all the terms of their agreement and is a complete and exclusive statement of those terms.

34. No Oral Modification: This contract may be modified or rescinded only by a writing signed by both parties.

35. Waiver: Waiver by either Buyer or Sellers of breach by the other party of any provision of this Contract is not a waiver of future compliance with the provision, and the provision remains in full force.

36. Construction of Contract: Buyer and Seller agree that no provision of this Contract shall be construed against or in favor of Buyer or Seller by virtue of authorship of this Contract.

37. Dispute Resolution and Consent to Jurisdiction: If any controversy or claim arises out of or relates to this Agreement, the parties shall attempt pre-suit mediation prior to the initiation of any law suit. Any action or proceeding related to this Agreement shall be instituted and prosecuted in the Courts of the County of ___________ and each party hereby waives any claim or defense relating to such jurisdiction and venue.

IN WITNESS WHEREOF, the parties have placed their signatures on this contract.

BUYER: ___________________ Logging Company, Inc.

By: ___________________________________(SEAL) __________________

Date of Signature

SELLER: __________________________

By: ____________________________________(SEAL) __________________

Date of Signature

“Exhibit A”

MAP

Exhibit “B”

____________________________________

Buyer Name

Logger Name

Load Date Time Species/Product Destination Driver Trailer ID # Scale Ticket # Net wt.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Authors:

Area Specialized Agent, Forestry
Harnett County
Extension Forestry Specialist
Forestry

Publication date: June 15, 2016

La universidad N.C. State University y la universidad N.C. A&T State University se comprometen a llevar a cabo acciones positivas para asegurar la igualdad de oportunidades independientemente de la raza, el color de la piel, el credo, el origen nacional, la religión, el sexo, la edad, la condición de veterano de guerra, o la discapacidad de la persona. Además, las dos universidades acogen a toda persona independientemente de su orientación sexual.

North Carolina State University and North Carolina A&T State University commit themselves to positive action to secure equal opportunity regardless of race, color, creed, national origin, religion, sex, age, veteran status or disability. In addition, the two Universities welcome all persons without regard to sexual orientation.