Hearsay is an out-of-court statement offered to prove the truth of the matter asserted. Hearsay generally is inadmissible unless a specific exception allows its admission.
A powerful but often overlooked way to obtain admission of otherwise inadmissible out-of-court statements is the “information acted on” rule. When the issue is whether a party acted prudently or in good faith, this rule may allow the admission of otherwise inadmissible hearsay information, on the grounds that the information is not offered for the truth of the matter asserted but merely to show the state of mind of the actor.
