Hearsay is testimony from a witness who is reciting an out-of-court statement that is being offered to prove the truth of the matter asserted.

The Federal Rules of Evidence prohibit introducing hearsay statements during applicable federal court proceedings, unless one of nearly thirty exemptions or exceptions applies. The Federal Rules of Evidence define hearsay as:

The "declarant" is the person who makes the out-of-court statement. (F.R.E. 801(b)). Thus, a trial court must separately analyze each individual statement, "sentence-by-sentence", rather than analyzing the narrative as whole for hearsay content or exceptions.

"The truth of the matter asserted" means the statement itself is being used as evidence to prove the substance of that statement. For example, if a witness says, "Margot told me she loved Matt" to prove that Margot did in fact love Matt, the witness's statement is hearsay. Thus, the reason a party offers a statement is central to determining whether it qualifies as excludable hearsay.

If a statement is being used to prove something other than the truth of what the statement asserts, it is not inadmissible because of the hearsay rule. A good example is the U.S. Supreme Court case of Tennessee v. Street (1985), in which a co-defendant's confession was properly admitted against the defendant—not for the hearsay purpose of directly proving that both men jointly committed a robbery and murder—but for the nonhearsay purpose of rebutting the defendant's claim that his own confession was elicited through the sheriff's coercive tactic of reading his co-defendant's confession to him.

In cases where a statement is being offered for a purpose other than the truth of what it asserts, trial judges have discretion to give the jury a limiting instruction, mandating the jury consider the evidence only for its intended, non-hearsay purpose.

Although the Federal Rules of Evidence govern federal proceedings only, 38 states have adopted the Uniform Rules of Evidence, which closely track the Federal Rules.

Rationale for excluding hearsay

The rule excluding hearsay arises from a concern regarding the statement's reliability. Courts have four principal concerns with the reliability of witness statements: the witness may be lying (sincerity risk), the witness may have misunderstood the situation (narration risk), the witness's memory may be wrong (memory risk), and the witness's perception was inaccurate (perception risk). Despite these risks, courts allow testimonial evidence because of in-court safeguards "calculated to discover and expose in detail its possible weaknesses, and thus to enable the tribunal (judge or jury) to estimate it at no more than its actual value".

These three safeguards reveal possible weaknesses in a statement:

In the above example, the witness's statement "Margot told me she loves Matt" is unreliable because Margot is not under oath, she is not subject to cross-examination, and she is not present in court for the fact-finder to assess her credibility. The statement is just too unreliable to be permitted as evidence in court.

Non-hearsay statements

Under the Federal Rules of Evidence, a statement that meets one of the two following conditions is considered not hearsay, and thus admissible. (F.R.E. 801(d)(1))

1. Prior statement of a witness

A prior statement by a witness is not hearsay if: