business records exception

Business records exception is a statutory exception to the rule against hearsay in Federal and most state courts. The exception allows parties to enter regularly compiled records within an organization that meet a certain level of trustworthiness, and this exception often plays an important role in business litigation. While called the business records exception, the exception actually applies to records of organizations broadly, including non-profits like churches and hospitals.

The exception has many important requirements, and the Federal rule exists in the Federal Rules of Evidence 803(6). First, the information in the record must come in a written form from someone who had first-hand knowledge of the event, action, opinion, or condition being admitted, and the person making the record must have done so as part of their job, meaning it can only come from employees. Second, the records must be made in the normal course of business. This requirement usually is discussed in terms of regularity of the record being made, but sometimes records made in infrequent circumstances will be allowed as long as they meet the trustworthy requirement. Thirdly, in most circumstances, a person must be able to testify to the standards of record keeping for the organization. Lastly, the records must not give rise to untrustworthiness. Courts often will look into whether the record appears to be self-serving, and they often will be more skeptical when the records are less regular or made in anticipation of litigation. State statutes may have much stricter or more flexible requirements for this exception, but they all generally try to ensure the trustworthiness of the records.

One must be careful with double-hearsay when applying the business record exception because there may be hearsay in the records that cannot be entered through the business record exception.

[Last updated in December of 2021 by the Wex Definitions Team]