Jason Shepherd is a 14-year-old Pathological lying who is constantly deceiving and misleading his way out of trouble. He tries to get out of his creative writing essay by making up a lie, but eventually gets caught by his English teacher Phyllis Caldwell, who alerts his parents. He is given three hours to submit his essay. Otherwise, he will fail English and go to summer school. Jason writes a story titled "Big Fat Liar", based on the lies he has told throughout his life. On his way to turn it in, he is struck by the limousine of movie producer Marty Wolf, head of Marty Wolf Pictures, who gives him a ride. Along the way, Marty reveals that he also tells lies and that, "The truth is overrated." In a rush, Jason accidentally forgets his essay in the limo upon arriving. Marty initially tries to return it, but is inspired by the story when he reads it and decides to keep it for himself.
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