As a California business attorney, I often tell clients that good recordkeeping is more than just smart business—it’s also a legal asset. One of the clearest examples of this is found in California Evidence Code Section 1271, which governs when business records
may be used in court despite the general rule against hearsay.
What is Hearsay?
In simple terms, hearsay is an out-of-court statement offered to prove the truth of the matter asserted. Put another way, hearsay is when someone tries to tell the court what another person said, instead of having that person come in and say it themselves.
Courts usually don’t allow this kind of secondhand information because the original speaker isn’t there to explain what they meant or answer questions about it. Here are a couple simple examples:
Example 1: Imagine a student says, “My friend told me the teacher said we don’t have homework.” That’s hearsay. If the teacher isn’t there to confirm it, we can’t be sure it’s true.
Example 2: In a court proceeding, if someone says, “My coworker told me the manager admitted to breaking the contract,” that’s hearsay. The coworker would need to come to court to say it directly.
Hearsay is generally inadmissible in court because the person who made the statement isn’t there to be cross-examined. However, there are many exceptions, and one of the most commonly used in business litigation is the business records exception.
California Evidence Code Section 1271
Here’s what the statute says:
Evidence Code § 1271
“Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered to prove the act, condition, or event if:
(a) The writing was made in the regular course of a business;
(b) The writing was made at or near the time of the act, condition, or event;
(c) The custodian or other qualified witness testifies to its identity and the mode of its preparation; and
(d) The sources of information and method and time of preparation were such as to indicate its trustworthiness.”
You can view the statute directly on California’s official Legislative Information website, a reliable and user-friendly resource for accessing the text of California laws.
Why Does Section 1271 Matter?
The purpose of Section 1271 is rooted in trustworthiness. If a business keeps records in the ordinary course of its operations—and relies on them to run day-to-day activities—those records are presumed to be reliable. That’s why the law allows such records to come into evidence, even though they would otherwise be excluded as hearsay.
However, records created solely for litigation are treated with skepticism. Courts recognize that a document made while preparing for a lawsuit may be biased or self-serving. For example, a spreadsheet calculating supposed damages, created weeks after a contract
dispute arose, is not as trustworthy as contemporaneous invoices and payment logs kept in the normal course of billing.
Whether you’re trying to introduce or exclude a business record in court, the first step is understanding the foundational requirements of this exception.
Key Requirements Under Section 1271
Let’s break down what Section 1271 actually demands:
1. The Record Must Document an “Act, Condition, or Event”
This threshold requirement is often overlooked. A document that merely states a conclusion or opinion—rather than an objective fact—doesn’t qualify. For instance, “We believe the vendor overcharged us” is not a business record under 1271. But “Vendor invoiced us $5,000 for services on 3/15/2024” could be. That, combined with admissible evidence that the vendor failed to provide any services on that date, or previously quoted a price that was $5,000 less, could prove the belief that the “vendor overcharged us” is a fact.
2. It Was Made in the Regular Course of Business
This involves two elements:
· The business routinely records that type of act, condition, or event as part of its operations, and
· The record was made by someone with firsthand knowledge—or based on information from someone who had a duty to observe and report facts as part of their job.
One of the rationales for this requirement is that businesses don’t usually fabricate information they rely on to make decisions.
3. It Was Made At or Near the Time of the Event
Timeliness is essential. A record made shortly after an event is more trustworthy than one created weeks or months later. Courts look at the time between the act, condition, or event and when the record was entered or recorded. If a dispute or lawsuit was already brewing when the record was created, its credibility could be questioned. This requirement, like all the others, has been the subject of many different legal opinions and interpretations.
4. A Custodian or Qualified Witness Must Authenticate the Record
Someone familiar with the recordkeeping practices—usually a business’s records custodian—must be able to testify about how the record was created and maintained. This helps establish the record’s identity and the reliability of the process that produced it.
5. The Source and Method of Preparation Must Be Trustworthy
This is the “catch-all” safeguard. Even if all the other elements are met, the record can still be excluded if it lacks indicia of trustworthiness. For example, if the information in the record came from someone who was merely speculating or lacked a duty to report facts, the record may not pass muster.
Don’t Confuse with Other Production Methods
Businesses are sometimes surprised when their records are excluded despite being produced under a subpoena. For example, production under Evidence Code Sections 1560–1561 (subpoena duces tecum) requires an affidavit—but many standard affidavits only recite conclusions, not foundational facts.
A business might think it’s “covered” because the records came with a declaration, but unless the declaration addresses how the records were made, by whom, and under what business practices, they may still be inadmissible under Section 1271.
How to Prepare Business Records That Stand Up in Court
Good records help you avoid disputes and support your position when one arises. Here are some tips:
- Be consistent: Regularly update and maintain records as part of your routine operations.
- Use standardized formats: For invoices, work orders, maintenance logs, or employee reports.
- Train employees: Make sure those responsible for creating records understand the importance of accuracy and timely entry.
- Assign custodianship: Designate someone familiar with how and when records are created to serve as a potential witness.
- Avoid conclusory statements: Stick to facts and data, not opinions or after-the-fact rationalizations.
Examples of Reliable Business Records
- Invoices issued at the time of service
- Payroll and timekeeping logs maintained weekly
- Inventory logs updated daily
- Customer communications logged through a CRM
- Maintenance and safety inspection checklists
Final Thoughts
California Evidence Code Section 1271 serves as both a courtroom tool and a business best practice guide. By maintaining accurate, timely, and consistent records, businesses not only run more efficiently but also build a credible evidentiary trail that can be critical when legal issues arise. If you’re unsure whether your current practices meet the standard—or need help preparing for litigation involving business records—consult with a business attorney experienced in evidence law.
One last advisement- business attorneys, like our firm, can help you prepare good business records. You should work with an experienced litigation attorney (who frequently should be focused on just litigation) regarding how business records are used in a litigation.