The Textual Canons in Contract Cases

In statutory interpretation classes, students have to cut their teeth on expressio unius, ejusdem generis, and noscitur a sociis.  These are Latin maxims that instruct interpreters how to furnish legal meaning.  To remind you: expressio unius is a canon directing that the inclusion of a term in a legal text suggests the exclusion of alternative terms that don’t appear in it; ejusdem generis holds that a general term should be read to be limited by a class that can be induced from more specific terms in the provision; and noscitur a sociis dictates that courts should know words by their associates and interpret more comprehensive words in a series to be limited by the enumerated items.  I got to thinking that these Latin canons aren’t exclusively principles of statutory interpretation per se but surely have also been used to interpret private law instruments like contracts, wills, and corporate charters, too.  With widespread interest in ‘textualism’ in the United States—indeed, it seems to have become the dominant method of interpretation at our Supreme Court—I wondered whether these linguistic canons were getting more traction outside the public law space in which they are native.  I decided to focus on contract interpretation, a field I teach and research, to see what I could learn about how these textual tools of interpretation were faring in contract law these days.  The results of that study have just been published in the Wisconsin Law Review.

In brief, I looked at two jurisdictions—New York and California—which have differentiated contract interpretation regimes.  To oversimplify a bit, New York thinks of itself as formal and largely textual and California tends to be more contextual, drawing on public policy and equitable principles that permit more departures from raw text more often.  One might have predicted that more formal interpretive regimes would be more likely to rely on textual tools like linguistic canons and more pragmatic regimes would be less interested in old Latin techniques of construction.  I also hypothesized that there would be increased attention to the canons in contract cases as a kind of osmotic effect from renewed interest in them within public law and pervasive teaching of them in American law schools, many of which have adopted required Legislation courses over the last several decades.  My basic tools of analysis after reading all the cases I could find in those states’ courts didn’t allow rigorous testing of these ideas but it did produce a set of findings that drafters and interpreters of contracts should know—and it laid the foundation for contract scholars to direct their research agendas to get more information about this interesting subject in the years to come.

Here were some take-away ideas from the study. First, both jurisdictions seem to favor ejusdem generis over expressio unius in contract cases and prefer both of those canons to noscitur a sociis.  Since there is some evidence that in statutory interpretation cases expressio unius is much more likely to be invoked than ejusdem generis, there is reason to think that courts see contracts differently from statutes, even when using linguistic tools.  My best guess is that ejusdem generis is much more likely to approximate party meaning than expressio unius and the value of party autonomy does enough work to contour contract interpretation that courts are keener to use canons that are decent indicators of likely intent in contracts, whereas they feel more comfortable imputing legal meaning with canons to statutes—where issues of collective intent and complex procedures that produce legislative product would be more likely to trigger different canons’ relevance.  Ultimately, contract drafters and litigators probably should pay ejusdem generis more mind.

Second, across jurisdictions, there seems to be an increased incidence of courts discussing textual canons in contract cases in recent decades.  My research methods were not calibrated to make a tight claim here—but the resurgence of cases discussing the canons emerged around the time textualism was gaining steam in the federal judiciary.  Also, although both jurisdictions see the uptick in discussing the canons in recent years, California was more likely to reject a canon-based reading in favor of a reading supported by a substantive policy choice—which is what one would expect from these differentiated regimes.  Litigators still need to be savvy about how the canons might function to help or hurt their clients but in California, they are less likely to decide a case, it seems.

Third, there were typical transaction types in which the canons were most relevant.  In both New York and California, insurance cases seemed to be the most common type of dispute where a canon might be discussed.  Courts appealed to canons whether coverage or exclusion provisions were at issue.  In New York, force majeure provisions and exculpatory clauses also triggered a bunch of canon discussions, whereas in California, it was land contracts and deeds that triggered canon discussions.  Given what we have learned about the disparate approach to force majeure clauses as between New York and California, it isn’t surprising that New York uses canons more there.  More generally, though, insurance drafters and litigators would be well-advised to bone up on their legal Latin!

There is lots more to learn.  Finding out that different canons mattered more in contract than they did in statutory interpretation tells us that even though there may be some trans-substantive trends about the use of hoary linguistic canons of interpretation, different specific canons can gain especial relevance in different fields.  Those who study corporations may find that still other canons of interpretation matter more than the ones I interrogated in my own study.  And those who study wills and trusts could find yet another set of linguistic tools to be most relevant with a slightly different constellation of priority.  As scholars, it behooves us to help train students, judges, and lawyers on the modes of reading most likely to matter to furnish an instrument with its legal meaning.

Ethan J Leib is the John D Calamari Distinguished Professor of Law at Fordham Law School and Visiting Professor of Law at Columbia Law School