Contract is Not Hearsay; It has Independent Legal Significance
Are words of a contract hearsay? Or do they have independent legal significance such that the hearsay doctrine does not apply? The answer is explained in a recent foreclosure dispute, U.S. Bank National Association as Trustee for Ramp 2006 EFC2 v. Bell, 48 Fla.L.Weekly D218a (Fla. 5th DCA 2022).
In this case, a trustee filed a foreclosure action. To establish it was the holder of the promissory note when it filed the foreclosure lawsuit, the trustee tried to introduce a Pooling and Servicing Agreement where the trustee was one of the parties that executed it. The borrowers objected to the Pooling and Servicing Agreement as hearsay which the trial court sustained. The trustee argued on appeal that the trial court erred because the Pooling and Serving Agreement was a non-hearsay document since it was admissible for its independent legal significance. The appellate court agreed with this brief legal point of law that is worthy of consideration (including citations):
This court has recognized that words of a contract are not hearsay because they characterize verbal acts and thus have independent legal significance. See Deutsche Bank Nat’l Tr. Co. v. Alaqua Prop., 190 So. 3d 662, 665 (Fla. 5th DCA 2016); see also A.J. v. State, 677 So. 2d 935, 937 (Fla. 4th DCA 1996) (“Words of a contract, often characterized as verbal acts, are non hearsay because they have independent legal significance — the law attaches duties and liabilities to their utterance.” (citing 2 McCormick on Evidence § 249 (4th ed. 1992))); Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527, 540 (5th Cir. 1994) (“Signed instruments such as wills, contracts, and promissory notes are writings that have independent legal significance, and are nonhearsay.” (quoting Thomas A. Mauet, Fundamentals of Trial Techniques 180 (2d ed. 1988))).
Bell, supra.
Keep in mind that just because a contract is not hearsay does not mean a party does not have to authenticate it. The party still needs to authenticate the contract. But what the contract says is not hearsay.
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