These very common words are frequently confused in everyday speech. Here is a helpful guide to help you avoid this confusion.
To 'lie' means to be in, or move into, a horizontal position on a surface. Put simply, it is to recline or rest. 'Lie' is an intransitive verb, meaning that it expresses action and the subject engages in that action, but nothing is being acted upon. In other words, the verb has no direct object, and does not express the kind of action that can be done to anything. Listed below are its principal forms:
Base form: Lie
Past tense: Lay
Past participle: Lain (this is quite formal and rarely used)
Present participle: Lying
'Lie' can also mean to say or write something that is deliberately untrue. While the past tense of 'lie' in the context of moving into a horizontal position is 'lay', it must be noted that in the context of telling an untruth it is not. It is, in fact, 'lied'. For example: