William Perkins’ book, The Art of Prophesying, is a gem. It is written as a means of instruction for preachers, but Perkins’ principles of interpretation can be used by anyone. With that said, here is what Perkins writes about biblical application:
Application is the skill by which the doctrine which has been properly drawn from Scripture is handled in ways which are appropriate to the circumstances of the place and time and to the people in the congregation (p. 54).
For an individual who is not a preacher, we would simply say that application is drawing out the teaching of a passage in such a way that it is instructive (in any number of ways, both negative and positive) to himself and his world (including his family, church, culture, etc.).
Perkins then goes on to describe what he considered to be the most important element of the application of Scripture:
The basic principle in application is to know whether the passage is a statement of the law or of the gospel. For when the Word is preached, the law and the gospel operate differently. The law exposes the disease of sin, and as a side-effect stimulates and stirs it up. However the gospel not only teaches what is to be done, it also has the power of the Holy Spirit joined to it. When we are regenerated by him we receive the strength we need both to believe the gospel and to do what it commands. The law is, therefore, first in the order of teaching; then comes the gospel (p. 54).
He also notes that
…Many statements which seem to belong to the law are, in the light of Christ, to be understood not legally but as qualified by the gospel (p. 55).
This is how the Israelites should have understood the Law – as qualified by redemption. But, the Apostle Paul writes,
Brothers,my heart’s desire and prayer to God for them is that they may be saved. 2 For I bear them witness that they have a zeal for God, but not according to knowledge. 3 For, being ignorant of the righteousness of God, and seeking to establish their own, they did not submit to God’s righteousness. 4 For Christ is the end of the law for righteousness to everyone who believes. 5 For Moses writes about the righteousness that is based on the law, that the person who does the commandments shall live by them (Romans 10:1-5).
They did not properly qualify the Law by the Gospel. If you take “do this and live” to mean that you are actually capable of gaining life through obedience, then you’ve missed the qualification of the Gospel, which tells us that Christ obeyed the Law in our behalf that we might be counted blameless through him.
This is an aspect of what Perkins recognizes as ‘rightly dividing the Word of truth’ (2 Tim. 2:15). It has been widely observed that the Apostle Paul uses a Greek word (Ὀρθοτόμεω) relating to his ‘second job’ as a tent-maker when he speaks of the art of ‘rightly dividing.’ He wants Timothy to ‘cut straight the Word of Truth.’ Perkins relates the word to the Old Testament sacrifices:
Right cutting is the way in which the Word is enabled to edify the people of God…
The idea of cutting here is mataphorical language possibly derived from the activity of the Levites, who were required to cut the limbs of the animals they sacrificed with great care. It is of this skill that the Messiah speaks: ‘The Lord has given Me the tongue of the learned, That I shoul dknow how to speak a word in season to him who is weary’ (Isa. 50:4).
There are two elements in this [right cutting of the Word]: (i) resolution or partition, and (ii) application.
Resolution is the unfolding of the passage into its various doctrines, like the untwisting and loosening of a weaver’s web…Sometimes the doctrine is explicitly stated in the passage…On other occasions a doctrine not specifically stated is correctly drawn from the text because, in one sense or another, it is implied in what is written…Note, however, that doctrines ought to be deduced from passages only when it is proper and valid to do so. They must be derived from the genuine meaning of the Scripture. Otherwise we will end up drawing any doctrine from any place in the Bible (pp. 48-51).
Perkins will go on to make his argument that the key principle of application is discerning between Law and Gospel, and a proper qualifying of the Law by the Gospel – this is a part of ‘cutting straight the Word of truth.’
Let me summarize: If you are going to apply the Scriptures well, you need to know the difference between law and gospel and you need to be able to understand how the law is qualified (i.e. how our position in relation to the law is qualified) by the gospel. Once you understand the law as law, and your inability to gain righteousness through it, you are well on your way to a proper application of the law. But if you stay there, if you fix your eyes on the law as if you will be able to produce righteousness in your own power, then you have failed to properly distinguish law from gospel. The Holy Spirit (read Romans 8) works through the gospel and gospel principles. You must therefore take the law and qualify it according to the gospel. This can be as simple as: I have failed, I know that in my own power I will still fail, but Christ has succeeded and paid for my sins, therefore I will walk by faith in him. This is the attitude the Spirit promises to bless. This is the “mindset of the Spirit” (Rom. 8:6) – always looking to Christ as he is offered in the gospel. (Read more about that HERE).
The main point here, from Perkins, is that in order to apply a passage legitimately, which also implies a proper understanding of the meaning of the text, you must train yourself diligently in what Walter Marshall calls “the rare and excellent art of godliness.” That is, obedience motivated by gospel principles. And in order to seek holiness by gospel principles, you must be able to discern the Scriptures’ distinction between Law and Gospel, which includes the qualifying of the Law by the Gospel.