Intro to the Federal Rules of Evidence - 52

3. The truth of the matter asserted
a. Relevancy issue
If the statement is offered for any purpose other than for its truth, it is not hearsay. Thus, the hearsay character of the statement cannot be examined until we know why the proponent is offering the evidence – i.e., its relevancy.

Deciding that a string of words is a statement does not mean it is hearsay. That depends on whether it is offered to prove what it asserts, which in turn depends on the proponent’s purpose, the speaker’s intent, and often on the broader factual context in which the statement was made.

b. Inapplicability of the rule
i) Verbal acts
A statement may be, by itself, an operative fact which gives rise to legal consequences under substantive law, e.g., words of a contract, defamation, threats, and the like. Such a statement, which is usually called a “verbal act,” is relevant, regardless of the truth of the word spoken. The fact that such words were said matters, not that they are true.

ii) Effect on hearer or reader
A statement that is offered to show its effect on the person who heard the statement is not hearsay, e.g., where the statement is offered to show only knowledge, good faith, reasonableness, emotional effect, etc.

iii) Declarant’s state of mind
A statement that is offered, as circumstantial evidence, to show the state of the mind of the declarant is not hearsay. For example, to show the intent of a party to contract negotiations; to show the state of mind of a criminal defendant; to show a witness’s bias.