The business records exception to the U.S. hearsay rule is based on Rule 803(6) of the

Federal Rules of Evidence First adopted in 1975, the Federal Rules of Evidence codify the evidence law that applies in United States federal courts. In addition, many states in the United States have either adopted the Federal Rules of Evidence, with or without local v ...

(FRE). It is sometimes referred to as the business entry rule.

Rationale

The basic rationale for the exception is that employees are under a duty to be accurate in observing, reporting, and recording business facts. The underlying belief is that special reliability is provided by the regularity with which the records are made and kept, as well as the incentive of employees to keep accurate records (under threat of

termination Termination may refer to: Science *Termination (geomorphology), the period of time of relatively rapid change from cold, glacial conditions to warm interglacial condition *Termination factor, in genetics, part of the process of transcribing RNA ...

or other penalty). The exception functions to allow the record to substitute for the in-court testimony of the employees, but it can only substitute for what the employee could testify about. The availability of the

declarant A declarant, generally speaking, is anyone who composes and signs a statement or declaration alleging that the information he has given therein is true. This differs from an ''affiant,'' as in the case of an affidavit the facts therein are swor ...

(the employee whose testimony is being replaced by the record) is immaterial for the purposes of this exception.

Reliability of the statements in the record

It must be apparent to the judge that the record was made in the regular course of business, i.e., that it was customary practice to make such an entry and that the entrant had a duty to record it (either by law or by the terms of his employment). The record must have been made at or near the time of the act, event, or transaction at issue. Furthermore, the record must consist of matters either within the personal knowledge of the entrant or within the personal knowledge of someone with a duty to transmit the information to the entrant. This last point was contested in the case of ''Johnson v. Lutz'', 253 N.Y. 124, 170 N.E. 517 (1930), which held that a business record is admissible only when it is made by an employee about information, obtained by him, from an informant who himself was under a business duty to impart that information. ''Johnson'' dealt specifically with the admissibility of

police report In legal terminology, a complaint is any formal legal document that sets out the facts and legal reasons (see: cause of action) that the filing party or parties (the plaintiff(s)) believes are sufficient to support a claim against the party ...

s, and set a limitation on the use of such reports in court. Even though the police officer was under a duty to properly record the statements of an

informant An informant (also called an informer or, as a slang term, a “snitch”) is a person who provides privileged information about a person or organization to an agency. The term is usually used within the law-enforcement world, where informant ...

, the informant himself was under no duty to report the events correctly, and therefore the informant's statement was still inadmissible hearsay.

Limitation on admissibility of records prepared for litigation

In the case of '' Palmer v. Hoffman'', , the Supreme Court of the United States ruled that an accident report created by a

railroad Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a pre ...

company which was prepared in anticipation of a lawsuit by the victim was inadmissible, because it was not prepared in the regular course of business. Railroad travel, and not litigation, was the primary business of the railroad, and therefore the report was not considered sufficiently reliable to be admitted into evidence.

Lack of record as evidence

FRE 803(7) states the negative counterpart of the business records exception: the use of the ''lack of a record'' to prove that a transaction or occurrence had not taken place, if it was the regular practice of the business to record such events if they had actually occurred.

Other types of business records

Under FRE 803(17), market reports and

quotations A quotation is the repetition of a sentence, phrase, or passage from speech or text that someone has said or written. In oral speech, it is the representation of an utterance (i.e. of something that a speaker actually said) that is introduced by ...

, directories, and other published compilations are considered generally admissible if they are generally used and relied upon by the public or by persons in particular occupations. Such information is considered admissible separate and apart from privately made business records described above.

References