Interpretation and Construction 2: Samuel Williston — Greg Klass

Post by Greg Klass

In my last post on the interpretation-construction distinction I described Francis Lieber’s supplemental view of construction, which can be found in his 1839 book, Legal and Political Hermeneutics. Lieber’s view is characterized by two claims. First, construction is supplemental: it steps in only when interpretation runs out. Second, the activity of construction is for the most part continuous with that of interpretation. “Construction is the building up with given elements, not the forcing of extraneous matter into a text.” (144) That said, Lieber also recognizes that sometimes construction departs from the spirit of the text, such as when the text yields to a superior legal principle.

It would be interesting to trace the influence of Lieber’s distinction between interpretation and construction throughout the next century of legal thought. Theophilus Parsons, for example, discusses the categories in his 1855 Law of Contract. James Bradley Thayer, in his 1898 Treatise on Evidence, expressly declines to adopt Lieber’s distinction, arguing that “neither common usage nor practical convenience in legal discussions support [it]”. (411 n.2) For my purposes, things get interesting with the 1920 first edition of Samuel Williston’s The Law of Contracts. In section 602, “Construction and interpretation,” Williston makes what I view as two improvements on Lieber’s theory.

First, Williston suggests a narrower conception of construction. The drawing of “conclusions that are in the spirit, though not in the letter of the text,” Williston argues, is not different in kind from interpretation and “seems of no legal consequence as far as the law of contracts is concerned.” (1160) Better, then, to limit what we call “construction” to activities fully distinct from interpretation. For example, “when it is said that contracts which affect the public are to be construed most favorably to the public interest, it is obvious that the court is no longer applying a standard of interpretation, that is it is not seeking the intention of the parties.” (1161) Similarly when a guarantee is interpreted in favor of the guarantor. Construction, for Williston, is the category of rules whose function is not to realize or extend the author’s intentions, but that is guided by some other principle or purpose.

(Interestingly, Williston suggests that contra proferentem—the rule that ambiguities are to be interpreted against the drafter—is a rule of interpretation, “since it should be anticipated that the person addressed will understand ambiguous language in the sense most favorable to himself, and that his reasonable understanding should furnish the standard” (1161). I would say this is at best a majoritarian rule of construction, and better supported by considerations of fairness and incentives than by interpretive fidelity. But that’s a subject for another post.)

That said, Williston follows Lieber is in conceiving of construction as supplemental to interpretation. “[A] rule of construction can come into play only when the primary standard of interpretation leaves the meaning of the contract ambiguous” (1161). Lieber and Williston both view rules of construction as stepping in when interpretation runs out—what I would call a supplemental conception of construction.

Williston’s second innovation is to suggest that neither interpretation nor construction is enough to get to the legal rule. Each concerns itself “with the legal meaning of the contract, not with its legal effect after that meaning has been discovered.” Id. The legal effect, Williston suggests, is a function of “substantive law of contracts which comes into play after interpretation and construction have finished their work.” (1161) A similar claim appears again in the comments to section 226 of the First Restatement, “What is interpretation”: “Interpretation is not a determination of the legal effect of language. When properly interpreted it may have no legal effect, as in the case of an agreement for a penalty; or may have a legal effect differing from that in terms agreed upon, as in the case of a common-law mortgage.”

Williston therefore identifies three sorts of rules: (1) interpretation, which aims to get at the author’s intention; (2) construction, which applies purely non-interpretive principles and steps in when interpretation runs out, e.g., in cases of ambiguity; and (3) the substantive law of contract, which specifies legal effects based on the work of interpretation and construction. The addition of (3) provides the tools for rejecting, at least with respect to contracts, Lieber’s implicit reliance on a command theory of law. The parties’ legal obligations are not simply the obligations they agree to. We need what Hart would call a “rule of recognition” to translate their agreement into legal consequences.