•Lies when it is very easy to tell the truth.
•Lies to get sympathy, to look better, to save their butt, etc.
•Fools people at first but once they get to know him, no one believes anything they ever say.
•May have a personality disorder.
•Has been caught in lies repeatedly.
•Never fesses up to the lies.
•Is a legend in their own mind.
•Exaggerates things that are ridiculous.
•One-upping. Whatever you do, this person can do it better. You will never top them in their own mind, because they have a concerted need to be better than everyone else. This also applies to being right. If you try to confront an individual like this, no matter how lovingly and well-intentioned you might be - this will probably not be effective. It's threatening their fantasy of themselves, so they would rather argue with you and bring out the sharp knives than admit that there's anything wrong with them.
•They "construct" a reality around themselves. They don't value the truth, especially if they don't see it as hurting anyone. If you call them on a lie and they are backed into a corner, they will act very defensively and say ugly things (most likely but depends on personality), but they may eventually start to act like, "Well, what's the difference? You're making a big deal out of nothing!" (again, to refocus the conversation to your wrongdoing instead of theirs).
•Because these people don't value honesty, a lot of times they will not value loyalty. So watch what you tell them. They will not only tell others, but they will embellish to make you look worse. Their loyalty is fleeting, and because they are insecure people, they will find solace in confiding to whomever is in their favor at the moment.
•They may be somewhat of a hypochondriac. This can come in especially useful when caught in a lie, for example, they can claim that they have been sick, or that there's some mysteriously "illness" that has them all stressed out. It's another excuse tool for their behavior.
•Obviously, they will contradict what they say. This will become very clear over time. They usually aren't smart enough to keep track of so many lies (who would be?).