Hearsay and circumstances of its admissibility - Business re...

Learning Outcomes

This article explains hearsay and the business records exception, including:

• Identifying when a document qualifies as a business record under FRE 803(6) or 803(7), and recognizing when the exception does not apply.
• Articulating each foundational requirement—regular course of business, regular practice, timing, personal knowledge plus business duty, authentication, and trustworthiness—for admitting business records over a hearsay objection.
• Distinguishing routine operational records from documents prepared primarily for litigation, and evaluating how motives to misrepresent affect admissibility on the MBE.
• Evaluating records that contain outsider statements or multiple layers of hearsay, and determining which portions can be admitted for their truth and which require a separate hearsay exception.
• Applying the business records and absence-of-records exceptions to common civil and criminal fact patterns, including medical and law-enforcement records, while spotting Confrontation Clause and public-records issues.
• Choosing between answer options that conflate business records with recorded recollection or public records, and eliminating distractors that overstate authentication or witness-availability requirements.

MBE Syllabus

For the MBE, you are required to understand hearsay and its exceptions, especially as they relate to business records, with a focus on the following syllabus points:

• The definition and rationale of the business records hearsay exception
• The basic requirements for admitting business records (FRE 803(6) and 803(7))
• When business records are inadmissible due to lack of trustworthiness or improper purpose
• The distinction between business records and records prepared for litigation (Palmer-type problems)
• The treatment of medical records and law enforcement records
• The impact of outsider statements and hearsay within hearsay in business records
• The interaction between business records and the Confrontation Clause in criminal cases

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is NOT a requirement for a business record to be admissible under the hearsay exception?
   1. The record was made at or near the time of the event.
   2. The record was made by someone with personal knowledge.
   3. The record was prepared in anticipation of litigation.
   4. The record was kept in the regular course of business.
2. A hospital record includes a nurse’s note about a patient’s symptoms. The nurse was on duty and made the entry during her shift. Is this note likely admissible as a business record?
   1. Yes, if the entry was made as part of the hospital’s regular practice.
   2. No, because the nurse was not a doctor.
   3. No, because medical records are never admissible.
   4. Yes, but only if the nurse testifies in court.
3. Which of the following is most likely to render a business record inadmissible?
   1. The record was made by an employee in the regular course of business.
   2. The record was made at the time of the event.
   3. The record was prepared specifically for use in a lawsuit.
   4. The record was made by a person with a business duty to report.

Introduction

Business records are a frequent source of evidence in both civil and criminal cases. The Federal Rules of Evidence provide a specific exception to the hearsay rule for business records, but only if strict admissibility requirements are met. Understanding when and how business records are admissible is essential for the MBE.

Key Term: Hearsay
An out-of-court statement offered to prove the truth of the matter asserted.

Key Term: Business Records Exception
A hearsay exception (FRE 803(6)) allowing certain records of regularly conducted business activity to be admitted as evidence, regardless of whether the declarant is available, if specific requirements are satisfied.

The Rationale for the Business Records Exception

The business records exception is based on the idea that businesses have a strong incentive to keep accurate records as part of their regular operations. Records created routinely to run the business—rather than to win lawsuits—are thought to be relatively reliable:

• Employees typically have a duty to make accurate entries
• Entries are made contemporaneously with the events recorded
• The business depends on accurate information to function

Key Term: Regular Course of Business
The ordinary, routine operations of an ongoing business, institution, or organization, including non-profits and professions, as opposed to special or one-off activities like preparing for litigation.

Because of this assumed reliability, the rules allow such records into evidence even though they are hearsay—provided all required elements are met and there is no indication of untrustworthiness.

What Counts as a “Business” and a “Business Record”

“Business” is defined broadly for evidence purposes. It includes:

• Corporations and partnerships
• Sole proprietorships and independent contractors
• Non-profit organizations, schools, and hospitals
• Government agencies and professional practices

A business record can be any memorandum, report, data compilation, or similar record of:

• Acts or events
• Conditions
• Opinions or diagnoses (e.g., medical diagnoses in hospital records)

Key Term: Business Duty to Report
An obligation, arising from a person’s role in a business or organization, to accurately observe and report information as part of their job.

Medical records are classic examples: clinical signs, test results, and treating physician diagnoses are routinely recorded in the ordinary course of hospital business and usually qualify.

Requirements for Admissibility (FRE 803(6))

For a business record to be admissible under the hearsay exception, all of the following must be established:

• Regular Course of Business: The record was made in the course of a regularly conducted business activity.
• Regular Practice: Making such a record was a regular practice of that business.
• Timing: The record was made at or near the time of the event it describes.
• Personal Knowledge with Duty: The information was supplied by someone with personal knowledge who had a business duty to report.
• Authentication Basis: A qualified witness (such as a custodian or other person familiar with the record-keeping) must testify to these supporting facts, or a proper certification must be provided.
• Trustworthiness: The source of information and the method or circumstances of preparation must not indicate a lack of trustworthiness.

Key Term: Basis (for Business Records)
The necessary facts that must be shown—regular business activity, regular practice, timing, personal knowledge with duty, and authentication—before a document can be admitted as a business record.

Let’s break down the key elements in more detail.

Regular Course of Business and Regular Practice

The record must be created as part of the business’s routine operations, not as a special, unusual event.

• Payroll logs, shipping manifests, sales ledgers, hospital charts, and maintenance logs usually qualify because they are regularly kept.
• A one-time letter drafted by a company executive to respond to litigation usually does not.

The exam often tests the difference between:

• A systematic record-keeping practice (admissible)
• An occasional or ad hoc note made for a special purpose (likely inadmissible as a business record)

Timing: “At or Near the Time”

The record must be made at or near the time of the recorded event, while the information is fresh. A delay of days or weeks may undermine admissibility if it is outside the normal timing of that business’s practices.

Personal Knowledge and Business Duty to Report

The information in the record must ultimately trace back to someone who:

• Had firsthand knowledge of the event or condition; and
• Had a business duty to report that information accurately.

Key Term: Personal Knowledge (Business Records)
Direct, firsthand awareness of the facts recorded, held by either the person who made the record or by an informant who had a business duty to transmit the information.

This can involve two roles:

• Informant: Person who actually observed the event (e.g., nurse taking vitals)
• Recorder: Person who enters the information into the system (e.g., data-entry clerk)

As long as both are acting within the business and under a duty to report/record accurately, the record can be admitted without calling either the informant or the recorder to testify.

Trouble arises when the informant is an outsider with no business duty.

Key Term: Double Hearsay (Hearsay Within Hearsay)
A statement that itself contains another hearsay statement (e.g., a business record that records a bystander’s out-of-court statement). Each layer must fall within an exception or exclusion to be admitted for its truth.

If a record is based on statements from outsiders (customers, bystanders, anonymous callers) who have no business duty to be accurate, that portion is not covered by the business records exception for its truth, unless another exception applies.

Authentication: Custodian or Qualified Witness

Key Term: Custodian of Records
The person responsible for maintaining an organization’s records, who can testify about how records are created, stored, and retrieved.

Key Term: Qualified Witness (Business Records)
Any witness with sufficient knowledge of the organization’s record-keeping practices to testify that the necessary requirements of the business records exception are satisfied; need not be the person who made the record.

To admit a business record, a party must authenticate it, typically by:

• Calling a custodian of records or another qualified witness, who testifies that:
  • The record was made in the regular course of business
  • It was the business’s regular practice to make such records
  • It was made at or near the time by a person with knowledge and a business duty
• Or offering a written certification from a custodian or qualified person, in jurisdictions following FRE 902(11), with appropriate advance notice to the opponent (self-authentication).

The authenticating witness does not need personal knowledge of the contents of the record or to have personally made the entry. On the MBE, any answer choice requiring the “actual author” or “every person in the chain” to testify is incorrect.

Trustworthiness Limitation

Even if a document satisfies every technical requirement, the court may still exclude it if the opponent shows it is untrustworthy. This is codified in FRE 803(6)(E).

Key Term: Trustworthiness (Business Records)
The overall reliability of a record, evaluated by looking at the source of the information and the circumstances or methods of preparation. If these suggest unreliability, the court may exclude the record despite technical compliance with the rule.

Factors suggesting a lack of trustworthiness include:

• Record prepared primarily to help one side in litigation
• Strong motive to misrepresent (e.g., self-serving internal accident report by an employee whose conduct is at issue)
• Irregular record-keeping or deviation from normal procedures
• Suspicious alteration or missing pages

When Business Records Are Inadmissible: Litigation-Prepared Records

Records prepared primarily for litigation, such as accident reports created after an incident with an expectation of a lawsuit, are generally not admissible as business records.

Key Term: Records Prepared for Litigation
Documents created mainly to support a party’s position in a lawsuit rather than to conduct ordinary business operations.

The classic example is Palmer v. Hoffman: a railroad’s accident report created after a train accident was excluded because railroading—not litigating—was the company’s primary business. The report was prepared with litigation in mind, so it lacked the reliability that supports the business records exception.

Many courts read Palmer narrowly and focus on whether:

• The report is primarily for litigation, and
• The preparer has a strong motive to misrepresent.

On the MBE, if the facts emphasize that the record was created “for the lawsuit,” “on advice of counsel,” or “to defend anticipated claims,” treat it with suspicion as a business record.

Outsider Information in Business Records

The business records exception does not automatically sweep in all statements contained in the record.

If a police report, for example, includes:

• The officer’s own observations (in a civil case) — possibly admissible if other requirements met
• A bystander’s detailed narrative — this is hearsay within hearsay, and the bystander is an outsider with no duty to report

The bystander’s statement is not covered by the business records exception and must independently fall under another exception (e.g., excited utterance, present sense impression, party admission).

On the exam, always ask:

• Who supplied the information?
• Did that person have a business duty to report?
• If not, can another exception justify that layer?

Absence of a Business Record (FRE 803(7))

The rules also allow evidence that a business record is missing when the business would normally have recorded such a matter.

Key Term: Absence of Business Record
A hearsay exception allowing proof that a matter did not occur or exist, based on the absence of any entry in records where such matters are regularly recorded (FRE 803(7)).

For example, the absence of any payment entry in a company’s ledger can be offered to show that no payment was made, provided:

• The business regularly records such payments
• A custodian or qualified witness testifies that a diligent search revealed no entry

This is frequently overlooked but testable on the MBE.

Who Must Make the Record

The record must be made by, or from information transmitted by, someone with a business duty to report. Information from outsiders (who are not under a business duty) generally renders that portion of the record inadmissible for its truth unless another hearsay exception applies, as discussed above.

Authentication and Certification

A business record must be authenticated, usually by a custodian or other qualified witness, or by a written certification. The witness does not need to have personal knowledge of the contents, but must be familiar with the record-keeping process. Some jurisdictions follow the federal rule allowing self-authentication through certification when:

• The custodian or qualified person certifies in writing that the record meets FRE 803(6); and
• The opposing party receives reasonable written notice and an opportunity to object.

Criminal Cases, Law Enforcement Records, and the Confrontation Clause

Police reports and similar law enforcement records require particular care.

• In civil cases, a police report can sometimes qualify as a business record or public record, though outsider statements within the report remain a separate hearsay problem.
• In criminal cases, the prosecution generally cannot introduce a police report containing officers’ observations or conclusions against the accused under the business records exception.

There are two main obstacles:

• Business/Public Records Limits: Courts often treat investigative observations by law enforcement differently, limiting their use against criminal defendants.
• Confrontation Clause: If a police report or forensic lab report is “testimonial” and the declarant is unavailable and not previously subject to cross-examination, the Sixth Amendment bars its use against the defendant, even if a hearsay exception technically applies.

However, law enforcement records may still come in:

• For non-testimonial administrative activities (e.g., jail booking records)
• Under other exceptions (e.g., recorded recollection when the officer testifies but no longer remembers)

On the MBE, if a police report is offered by the prosecution for the officer’s observations, expect it to be excluded; if offered in a civil suit, it is more likely to be treated as a business or public record, subject to the usual trustworthiness and outsider-statement limitations.

Relationship to Other Record-Based Exceptions

It is important not to confuse the business records exception with other record-related exceptions:

• Recorded recollection (FRE 803(5)) applies when a witness once knew something, made or adopted a record when the matter was fresh, but now cannot recall well enough to testify. The record is read to the jury; the proponent cannot introduce the document as an exhibit (but the opponent can).
• Public records (FRE 803(8)) cover records of public offices or agencies and have their own requirements and limits, especially in criminal cases.

Business records differ in that they:

• Focus on records of any regularly conducted activity (including private businesses and non-profits)
• Are admitted as exhibits, not merely read to the jury
• Do not require the person who made the record to be unavailable

Worked Example 1.1

A trucking company keeps daily logs of all deliveries. After an accident, the company’s logbook is offered to show that a delivery was made at a certain time. The log was made by the dispatcher as part of her regular duties, at the end of each day.

Answer:
The logbook entry is admissible as a business record. It was made in the regular course of business, making such entries is a regular practice, it was created at or near the time of the deliveries, and it was based on information from employees with a business duty to report. A custodian or qualified witness can authenticate the record.

Worked Example 1.2

A company’s safety manager prepares a detailed report about an accident, including interviews with employees and conclusions about fault, specifically to defend against a lawsuit.

Answer:
The report is not admissible as a business record. It was prepared in anticipation of litigation, not as part of routine business operations. The litigation motive undercuts the reliability that justifies the business records exception, and the court may exclude the report as untrustworthy.

Worked Example 1.3

A hospital keeps electronic charts for each patient. As part of routine intake, nurses record the patient’s symptoms and clinical signs. In a later malpractice suit, the plaintiff offers the chart to show the patient had severe chest pain at admission.

Answer:
The chart is likely admissible as a business record. The hospital is a business; keeping charts is a regular practice; the entries were made at the time of treatment; and the nurse had personal knowledge and a business duty to report. The information relates directly to diagnosis and treatment, which is within the hospital’s primary business activity.

Worked Example 1.4

A hospital chart includes a note: “Patient states that the driver of the blue car ran a red light and hit her.” The plaintiff offers the chart to prove that the other driver ran the red light.

Answer:
The chart itself can be a business record, but the patient’s statement about who ran the red light is outsider hearsay within the record. The patient had no business duty to report accurately. That statement is not covered by the business records exception and must qualify under another hearsay exception (e.g., excited utterance) to be admitted for its truth. Without another exception, the court should exclude that portion if offered to prove who ran the light.

Worked Example 1.5

A store regularly records all customer refunds in a computer database. In a contract dispute, the store testifies that a search of its records shows no refund issued to the plaintiff and offers a printout showing no entry.

Answer:
The absence of an entry is admissible under FRE 803(7) to show that no refund was made. The store regularly records refunds, a custodian or qualified witness can testify that a diligent search found no entry, and it is the regular practice to record such events. The lack of a record is itself probative that the event did not occur.

Worked Example 1.6

In a civil negligence action arising from a car accident, the plaintiff offers the police accident report. The report includes the officer’s diagram of the accident scene and description of skid marks observed at the scene shortly after the collision.

Answer:
The officer’s observations and diagram may be admissible in a civil case as a business or public record, assuming the report was made in the regular course of the police department’s activities and at or near the time. However, any third-party witness statements included in the report are outsider hearsay and require their own exception. In a criminal case against the driver, the prosecution generally could not use the officer’s observational statements in the report against the defendant because of the Confrontation Clause and public-record limitations.

Exam Warning

Business records are not automatically admissible. If the record was prepared mainly for litigation, if the source of information is an outsider not under a business duty, or if the circumstances show a motive to misrepresent, the record will likely be excluded. Always analyze:

• Why the record was made
• When it was made
• By whom and based on whose information

Revision Tip

On the MBE, look for facts showing when, why, and by whom the record was made. If the record was created for a lawsuit, or if key information comes from an outsider, it is probably inadmissible as a business record. Also ask whether each layer of hearsay in the document has its own exception.

Key Point Checklist

This article has covered the following key knowledge points:

• The business records exception allows certain records to be admitted despite the hearsay rule when FRE 803(6) requirements are satisfied.
• Admissibility requires a regularly conducted business activity, a regular practice of making such records, timely creation, personal knowledge plus a business duty to report, and an adequate authentication basis.
• Courts may exclude otherwise qualifying records if the source of information or the method or circumstances of preparation indicate a lack of trustworthiness.
• Records prepared primarily for litigation, or based on outsider information with no business duty, generally do not qualify as business records for their truth.
• Business records may be used to prove the absence of a transaction or event when the business regularly records such matters (FRE 803(7)).
• Medical records are often admissible to the extent entries relate to diagnosis or treatment; narrative fault statements by patients usually require a separate hearsay exception.
• Police and law enforcement reports are treated more strictly in criminal cases due to both the limits of the business/public records exceptions and the Confrontation Clause.
• The custodian of records or another qualified witness can establish admissibility; the record-maker need not testify, and the witness need not know the contents of the record.
• Business records are admitted as exhibits and can be contrasted with recorded recollection (read to the jury) and public records (agency-focused).

Key Terms and Concepts

• Hearsay
• Business Records Exception
• Regular Course of Business
• Business Duty to Report
• Personal Knowledge (Business Records)
• Basis (for Business Records)
• Records Prepared for Litigation
• Double Hearsay (Hearsay Within Hearsay)
• Custodian of Records
• Qualified Witness (Business Records)
• Trustworthiness (Business Records)
• Absence of Business Record