The Lie

A lie is a type of deception in the form of an untruthful statement with the intention to deceive, often with the further intention to maintain a secret or reputation.

the purpose ?

To make someone happy by complimenting on his/her efforts, even though deep down you know that the standard's below par.

To avoid confrontation cos speaking the truth will only complicate things. Better to not say at all or to twist the story.

To avoid dampening moods by putting up a false front, you will blend in with your peers. Revealing your negative emotions will simply spoil everyone's mood.

To get your point across by exaggerating on things and situations. Else it might just be taken light heartedly.

To achieve your goal, for example a lawyer defends his client, whom in reality is guilty of committing a crime. (reminds me of Jim Carrey's Liar Liar)

Fact of the matter is..
Truth hurts.

So its better to lie sometimes. Of course not so much to the extend that you start losing trust. I'm just making some general instances on why people lie. In no way do I advocate such doings. Trust me ;)