Dialogue, speaking, and conversations in a story are tricky things. Dialogue is governed by the rules of grammar and form. If you want it to be English (or at least understood), there are certain musts to be followed. Like any other rule of grammar, those concerning dialogue cannot be overlooked lest a written work be rendered unreadable -- or at least annoying to look at.

The following are hard and fast rules; there are no exceptions and no alternate view points in the English language. These are exactly the rules for quotations within writing that you'll find in any guide to grammar; if you are not doing this, then you are doing it wrong.

Simple as that.

Now, anyone could just pick up the Bedford Handbook and try to absorb this knowledge, but I figured it would be better to give self-explanatory examples pertaining only to speech and dialogue. There are a lot of other rules for taking quotes from other written materials and the like that really do not come up in stories.

The following is a sample conversation between a guy, a girl, and a talking horse about how to write dialogue in a story. That's right -- a written conversation about how to write conversations. I can't make this any easier for you, folks.

"Written dialogue -- including the punctuation -- appears inside of quotation marks," some guy explained. "Since my speech starts a sentence, it is capitalized. The non-dialogue portion is not capitalized as it is not starting the sentence," he went on.

The woman elaborated, "If a quote is the start of a sentence, it must still be capitalized -- even if it is not the start of the sentence which contains it."

"Every new speaker must start a new paragraph, too," informed the horse. "If the same speaker has multiple things to say, they may be placed within the same paragraph."

"A quoted statement will have its period replaced by a comma if it does not end the sentence which contains the quote," the man expounded. "Since this quote does end the sentence, it is terminated with a period."

"But what if a question is asked?" inquired the woman, who correctly placed a question mark inside of the quotation marks at the end of the quote instead of at the end of the entire sentence.

What if the girl had instead said, "If the quotation ends with a different punctuation mark than the containing sentence, put the sentence's appropriate punctuation at the end outside of the quotation marks"? Oh, right, the punctuation goes outside of the quotation marks with no punctuation before the final quotation mark.

"What would happen," began the talking horse, "if a quote was broken apart by explanatory words or description?"

"As long as the quote is one continuous sentence," the woman informed, "every part is set off with commas! Remember, too, that only the starts of sentences -- not quotations -- are capitalized."

"You are correct," he confirmed and ended the first sentence with a period. "Separate sentences made in the same paragraph still require their normal punctuation. Of course, if the quote is not interrupted by non-dialogue, there is no reason to break the quote. It can continue within the same quotation marks."

A statement by the man such as "I am not set off by commas" lacks any commas before or after the quotation as it is not the object of an explanatory action like he said.

"Neigh! If it is obvious who the speaker is, and they are performing no other action than speaking, it is sufficient to write only the quotation and imply both the speaker and action."

The girl stole the spotlight by doing a dance. "A quotation with an implied speaker and action may comprise an entire paragraph or only a sentence in that paragraph."

"If someone is speaking for multiple paragraphs," told the talking guy, "a paragraph that ends in a quotation must not end with a quotation mark as long as the speech continues at the start of the next paragraph.

"A quotation mark must begin the new paragraph being spoken by the previous speaker," rambled on the man. "Since I am no longer going to be speaking, I can end this paragraph's quote with a quotation mark."

The woman then took the time to explain indirect speech, in which a statement is described in summary -- not the exact words -- and therefore does not appear within quotation marks. She seems to find it useful alternative to quotes which could be considered long or dry.

"If someone wanted to quote this quote," quoth the man, "one would need to put single quotes around 'If someone wanted to quote this quote' as it already appears within double quotation marks. Someone could get crazy by quoting, 'one would need to put single quotes around "If someone wanted to quote this quote" as it already appears within double quotation marks,' which would require changing all single quotes within the quote to double quotes! Remember that single quotes are affected by this -- not apostrophes that appear in contractions and possessives."

So did you get the hang of things? Understand how quotations work now? If you don't, here are all of the writing rules for your further learning and reference, although if you structure everything you write like the above, you'll be fine.

• Anything that is directly stated word for word -- either spoken, read, or written -- must be enclosed within quotation marks or double quotes (") around every point the statement begins and ends.
  • If a direct quote occurs inside of a direction quote enclosed in quotation marks, it must be enclosed within single quotation marks (') instead, which is just an apostrophe on keyboards. (Example)
  • If another direct quote occurs inside of that quote enclosed within single quotes (which, itself, is already inside of a quote), double quotes would be used again. (Example)
  • Direct quotes can be made italic instead of put in quotation marks, although this is normally done for short or single-word quotes (and occasionally thoughts, by some authors).
• The entire quoted phrase is considered to be a single noun -- either a subject or a object.
  • Try replacing a quotation with a generic noun, such as something.
    • He said "I shall stop you!" / He said something.
    • "Your time is nigh," was whispered on the wind. / Something was whispered on the wind.
    • "I hate you," she said. / Something she said. / She said something.
  • Quotations are one of the few parts of English that still allow a disregard to the normal subject/predicate ordering (or Yoda speak). (Example)
  • The part of a sentence after a quotation is not capitalized as it is part of the same sentence; if a direct quote ends a sentence, this would obviously not apply to the next sentence. (Example)
  • The start of a direct quotation is capitalized if the quote is the start of a sentence -- not necessarily the start of the of which it is a part. (Example)
• The direct quote includes the punctuation at the end of a quote.
  • If a direct quote is the object of a speaking or declaring action and is a complete sentence but does not end the sentence of which the quote is a part, replace the period with a comma inside of the quotation marks. (Example)
  • If a direct quote is not the object of a speaking or declarative action (speech, thought, reading, writing, or anything else which would create words), then the period would simply be removed and not replaced by a comma. (Example)
  • If a question mark or exclamation point ends a direct quote, it appears as normal at the end of the quote, before the quotation marks. (Example)
  • If a direct quote ends the sentence of which it is a part but the sentence as a whole ends in a non-period, end the direct quote with no punctuation within the quotation marks and place the sentence's punctuation outside the quotations. (Example)
• A direct quote may be broken into multiple parts.
  • A quote is considered a single subject or object even if it is broken apart.
  • A quote may span multiple paragraphs.
    • If the same speaker ends one paragraph and continues at the start of the very next, the terminal quotation mark must not be placed at the paragraph's end, but it must be placed at the next paragraph's beginning. (Example)
  • A quote may be broken apart in a single sentence. (Example)
  • If the quotation is not the result of a speaking or declarative action, it must not be set off from the explanatory, non-quoting part of the sentence by a comma -- before the quotation marks. (Example)
• A sentence or paragraph may consist entirely of a direct quote if both the actor and action can be easily inferred. (Example)

The above explanations tend to be a bit more wordy than something like the Bedford Handbook, but if terse writing like found in those writing guides was so easy to understand, I doubt there would be as much flagrant and rampant errors as we see today. Instead, I tried to be as complete as possible -- and possibly repetitive -- as far as dialogue is concerned.