Using precedence to put parens in the right places

Parens.tex

\documentclass[11pt]{article}

\usepackage{etoolbox}
\newcounter{fixity}

\newcommand{\withFixity}[2]{
  \ifboolexpe{ test{ \ifnumless{ \value{fixity} }{ #1 } }
  }{ \setcounter{fixity}{#1} #2
  }{ \setcounter{fixity}{#1} (#2) }
}

\newcommand{\Abs}[2]{\withFixity{1}{\ensuremath{\lambda #1. #2}}}
\newcommand{\App}[2]{\withFixity{2}{\ensuremath{#1 #2}}}
\newcommand{\Var}[1]{\ensuremath{#1}}

\newcommand{\LC}[1]{\setcounter{fixity}{0} #1}

\begin{document}
\LC{\App{\Abs{x}{M}}{\App{\Abs{y}{N}}{P}}}

\LC{\Abs{x}{\App{\App{\Abs{x}{M}}{P}}{N}}}
\end{document}