Rural Heritage Logging Camp

Horse Logging Contracts
by Tim Carroll

I just got back from looking at another timber sale. On my way home I was trying to put together a contract in my head that would fit the needs of the landowner, while protecting me from a legal stand point.

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:

HorseShoe A contract needs a starting date and a completion date. You must make clear how much time you need to finish the work.
HorseShoe 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?
HorseShoe 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.
HorseShoe 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 paint—paint is better, since ribbons can easily be removed.
HorseShoe 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 grades—veneer, number one, number two, and number three. Each grade has a different value.
HorseShoe 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.
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.
HorseShoe 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.
HorseShoe 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.
HorseShoe Specify who is responsible for the cost of hauling the logs—the landowner, the logger, or the mill.
HorseShoe Lay out the landowner's expectations. For example, does he expect you to provide access to the site, or will that be his responsibility?
HorseShoe 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 work—since you're putting your reputation on the line—if 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.
HorseShoe 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.
HorseShoe 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.
HorseShoe 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.
HorseShoe 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.
HorseShoe 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.
HorseShoe 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.
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.
HorseShoe 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.
HorseShoe Specify a set amount for the deposit on the sale. This binds the contract.
HorseShoe 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.
HorseShoe 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 business—you have to deal with them if you're serious about horse logging.


Tim Carroll is the owner/operator of Cedar River Horse Logging and president of the North American Horse & Mule Loggers Association. This article appeared in the Winter 1999 issue of Rural Heritage.

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29 April 2012 last revision