Legal Definitions - shop-book rule

The shop-book rule is a legal principle that allows certain business records to be used as evidence in court, even though they might otherwise be considered "hearsay." Hearsay is generally an out-of-court statement offered in court to prove the truth of what it says, and it's usually not allowed because the person who made the statement isn't there to be questioned. However, the shop-book rule recognizes that records kept in the regular course of business are often reliable because businesses depend on their accuracy.

For a record to be admitted under the shop-book rule, it must meet specific criteria:

• It must be an original bookkeeping record (or a reliable copy of one).
• The entries must have been made in the ordinary course of business, meaning they were part of the routine, day-to-day operations.
• The records must be introduced by someone who maintains them or has direct knowledge of their creation and accuracy.

This rule ensures that routine, trustworthy business documentation can be presented as evidence in legal proceedings.

• Example 1: A Freelance Designer's Invoice Dispute

  Imagine a freelance graphic designer is suing a former client for an unpaid invoice. The client disputes the number of hours worked. To prove the work performed and the time spent, the designer wants to introduce printouts from their project management software, which automatically logs daily work hours, tasks completed, and project milestones for each client. The designer herself presents these records in court.

  How it illustrates the rule: These digital records, when printed, serve as original bookkeeping records. The entries were made in the ordinary course of the designer's business to track projects and bill clients accurately. The designer, who maintains these records as part of her daily operations, is the one introducing them. Therefore, they would likely be admissible under the shop-book rule to show the truth of the hours worked and services provided.

• Example 2: A Restaurant's Inventory Loss Claim

  A small restaurant files an insurance claim after a freezer malfunction caused a significant loss of perishable food. The insurance company questions the value of the lost inventory. To substantiate their claim, the restaurant owner wants to present their daily inventory logs, which detail all food deliveries, usage, and spoilage, along with corresponding purchase receipts. The restaurant's head chef, who is responsible for managing and recording inventory, testifies and introduces these documents.

  How it illustrates the rule: The daily inventory logs and purchase receipts are original records kept routinely by the restaurant to manage its stock and finances. The entries reflect the ordinary course of business operations. The head chef, as the person who maintains and oversees these records, is the appropriate individual to introduce them, making them admissible under the shop-book rule to prove the value of the lost goods.

• Example 3: A Property Management Company's Maintenance Records

  A tenant is suing their landlord for failing to address a persistent plumbing issue. The landlord, represented by a property management company, wants to demonstrate that they did respond to maintenance requests. The property manager introduces the company's maintenance request log, which shows the dates requests were received, the actions taken, and the dates repairs were completed, along with copies of work orders issued to plumbers.

  How it illustrates the rule: The maintenance request log and work orders are original records created as a standard part of the property management company's daily operations. These entries are made in the ordinary course of business to track and address tenant issues. The property manager, who is responsible for maintaining these records, is presenting them, making them admissible under the shop-book rule to show the company's efforts to address the plumbing problem.