HARD TIMES IN THE SOFTWOODS: CONTRACT TERMS, PERFORMANCE, AND RELATIONAL INTERESTS IN NATIONAL FOREST TIMBER SALES

Market price changes during the executory period of long-term timber contracts in the early 1980s created hardship not only on the timber companies bound by such contracts, but also on the United States Forest Service. Such timber sale contracts had no relationship to economic reality. This problem created situations where enforcement of the contract as originally agreed could put the timber company out of business and create economic chaos for small timber-dependent communities. Although traditional contract scholarship assumes that contracts are arms-length bargains struck between parties with no ongoing relationship before or after such contract, the author finds this assumption does not fit all market systems. This Article examines Forest Service timber sales contracts and the realities of economic recession in light of relational contract theory and shows how relational contract law is a preferable model for contracts that arise within an ongoing relationship in a market system where the parties are dependent on each other.