A few months ago I encountered what was, at least for me, a new defense of dysfunctional contract language. When I pressed a few people to justify their support for a traditional usage, they responded that because plenty of people share their view, it must be correct. That relies on the logical fallacy argumentum ad populum, also known as “appeal to the masses” and various other names.
In my mind, I had tagged that excuse as the last resort of the traditionalist, but I’ve now been offered yet another defense, namely that contract usages mean whatever people think they mean. As an excuse for dysfunctional contract language, that’s even more forgiving than argumentum ad populum. After all, argumentum ad populum treats popular acclaim as a proxy for validity. By contrast, according to this latest defense, simply thinking that a usage expresses a given meaning is enough to make that interpretation valid.
Why It Doesn’t Work
Here’s how a law-school professor phrased it in an email to me (the misspellings are in the original):
I think that language takes meaning from linguistic & cultural context, so that if alot of lawyers think that X and Y mean different things even though they don’t “logically” or even in the smattering of cases that end up in opinions, than X and Y actually do mean different things in the performance of deals!
When tackling the notion that contract usages mean whatever people think they mean, you have to start by recognizing that generally you can’t determine from a contract the meaning those drafting or negotiating the contract attributed to a given usage, because generally a contract doesn’t offer a gloss on usages it employs. After all, that’s why you’re looking into the meaning of a given usage in the first place! In fact, because contract drafting is precedent driven, with much heedless copy-and-pasting, those drafting and negotiating a contract might have no occasion to consider what a given usage means unless it happens to become an issue in negotiations.
So assessing what people think a given usage means is an uncertain exercise that relies heavily on anecdotal evidence and commentary of varying quality and relevance.
With those reservations in mind, let’s consider my law-school interlocutor’s X-and-Y hypothetical from two perspectives. First, let’s assume there’s no consensus among those who work with contracts as to what a given usage means. Instead, different and perhaps overlapping meanings are attributed to the usage. In that circumstance, there’s no basis for attributing meaning to that usage in a given contract based on what people think. Which of the alternative meanings would you apply?
A contract usage that would fit this first scenario is indemnify and hold harmless. I hear people proclaim with conviction an assortment of different takes on indemnify and on hold harmless.
For the second scenario, let’s assume there’s a rough consensus among those who work with contracts as to what a given usage means. If nevertheless there’s debate as to what it means, that must mean that other considerations apply. For example, a constituency that’s broader than those who work with contracts might think the usage in question means something different. And there’s semantics—what my law-school interlocutor presumably has in mind with their reference to logic, complete with scare quotes. And there’s caselaw. Some combination of those factors would provide a basis for concluding that a given usage does not in fact mean what those who work with contracts think it means.
A contract usage that might fit this second scenario is the ostensible hierarchy of efforts standards. I’ve written plenty about that, with more to come.
So conceptually, there’s no reason to accept that if some who work with contracts interpret a traditional usage a certain way, that by itself makes their interpretation valid.
Why the Law Doesn’t Support It
When as politely as I could I ran an earlier version of these musings by my law-school interlocutor, here’s how they responded:
I understand your position. It’s often expressed by first-year students (and second and third years, who have not, I think, been persuaded by me). It is coherent. But it is not the law.
Let’s consider what my law-school interlocutor meant by “it is not the law.” All that I can think of is that they’re referring to Restatement (Second) of Contracts’ embrace of the mutual standard of interpretation. Allow me to explain.
Standards of contract interpretation fall into two categories: objective standards, which assign a meaning to words according to external criteria; and subjective standards, which assign a meaning according to the state of mind of one or more of the parties to the agreement.
Here are the subjective standards, as stated in 11 Williston on Contracts § 31:1 (4th ed.):
— a mutual standard, which allows only those meanings which conform to an intention common to both or all of the parties, and assigns this meaning although doing so violates the usage of all other persons.
— an individual standard, which attaches to words or other manifestations of intention whatever meaning the person employing them intended them to express, or whatever meaning the person receiving the communication understood the words or manifestations to convey.
11 Williston on Contracts § 31:14 provides some context (footnotes omitted):
While the vast majority of courts, both historically and currently, utilize [objective standards], strong arguments have been advanced for the universal recognition and application of a purely mutual standard, the most forceful being that, since words do not have a universally applicable meaning, the certainty allegedly achieved by applying a general or limited objective standard is largely an illusion. … [C]ourts, and especially commentators, have increasingly expressed frustration at a set of rules that, while purporting to seek the intention of the contracting parties, largely ignores, and even prohibits through the parol evidence rule, testimony regarding that intention by those who presumably know it best: the parties themselves. Due in part to this frustration, and in part to a belief that modern juries are more sophisticated, better educated, and thus less likely to be misled by self-serving party testimony, and finally, to a belief that other safeguards exist which lessen the harm likely to follow the adoption of a subjective, mutual standard, the drafters of the Restatement Second have, at least in some settings, embraced a mutual standard of contract interpretation.
More specifically, Restatement (Second) of Contracts § 201 says, “Where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that meaning.”
So the mutual standard of interpretation isn’t, to use the phrase employed by my law-school interlocutor, “the law.” Instead, it’s one take on the law. But more to the point, 11 Williston on Contracts § 31:13 (4th ed.) explains what’s required for the mutual standard to work (footnotes omitted, emphasis added):
A mutual standard of contract interpretation is subjective and gives the words by the parties a meaning that conforms to an intention common to both or all of them, attaching this meaning even though it differs from the meaning others would ascribe to the words. Under the traditional view that contracts are to be interpreted according to the objective meaning of the terms employed, there is no difficulty in applying a mutual standard, as long as the special meaning which particular terms are intended to bear are expressly set forth by the parties. Thus, it is said that the parties to an agreement may furnish their own glossary of terms which they have employed, even if their definitions are unknown to lexicographers. The complication arises when the special meanings are known only to the parties themselves. Under the traditional view, when the law requires a contract to be in writing, the requirement demands a standard which, as far as the uncertainty of language permits, would furnish to the court evidence of the transaction in a form that is not wholly dependent for its meaning on the ideas of the parties to it. A code which is known only to the parties using it, and is not itself in writing, is a language which does not fulfill that purpose.
So the mutual standard doesn’t work unless the parties to a contract make clear in the contract what their intended meaning. That’s exactly what doesn’t happen when people argue over confusing contract usages. It follows that the one principle of interpretation that gives weight to what people think contract usages mean has no place in this discussion.
If my law-school interlocutor had some other basis for saying that it’s the law that contract usages mean whatever people think they mean, I have no idea what it is. I’m open to suggestions.
What “Words Mean Whatever People Think They Mean” Actually Applies To
If in defense of traditional contract usages you invoke the notion that words or phrases mean whatever people think they mean, you’re taking that notion out of context.
Usually it’s invoked in debate over the changing meaning of words and phrases. On one side you have those who bemoan the tendency of speakers and writers to debase a word by overextending it beyond some ostensible proper meaning. On the other side you have those who think it futile and wrongheaded to try to stand in the way of changes in language. Saying that words mean what people think they mean is one way of acknowledging that the latter camp has a point. (This sort of debate is part of broader squabbling between “prescriptivists” and “descriptivists.”)
To take just one example at random, this Language Log post quotes, in a discussion of the word fulsome, the following statement by an English journalist: “Etymology is all very well and good, but the only final arbiter of what a word means is what people understand it to mean.”
Such debate take place because the meaning the speaker attributes to the word in question—whether it’s fulsome, literally, or some other flashpoint in this debate—is clear on its face. If I say, “I’m so hungry I could literally eat a horse,” it’s clear that I’m using the word literally to add emphasis, as opposed to using it to emphasize the exact truth of the statement. To anyone inclined to quibble, the issue isn’t that my meaning is unclear, it’s whether it hews to some orthodoxy.
So those who invoke in the context of unclear contract usages the notion that words or phrases mean what people think they mean have transplanted it to a context where it makes no sense.
Wrapping Up
There’s actually an even broader debate over whether words mean what people think they mean. On the one hand you have Humpty Dumpty, in Through the Looking Glass: “‘When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean–neither more nor less.’” On the other hand, you have … Wittgenstein. (See this ThoughtCo. post.)
But I don’t need to immerse myself in Wittgenstein, because it’s amply clear that despite any aura of learnedness, the words-mean-whatever-people-think-they-mean perspective makes no sense when applied to confusing contract usages. Instead, as is evident in each of the three contexts discussed above, it works only when the meaning in question is clear.
I’m not suggesting that what people think confusing contract usages mean is somehow irrelevant. Instead, you take that into account as you engage in the hard labor, the trench warfare, that’s involved in determining, usage by usage, the best way to avoid confusion. Welcome to my world!