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Ordinary Course of Business
Practical Law Glossary Item w-021-8284 (Approx. 2 pages)
Glossary
Ordinary Course of Business
Normal and routine day-to-day operations consistent with the past practices and customs of the business.
It is used in various legal contexts, such as bankruptcy, tax, antitrust, corporate, and commercial transactions. For example, Section 1-201 of the Uniform Commercial Code defines a "buyer in the ordinary course of business" as:
- "A person that buys goods in good faith.
- Without knowledge that the sale violates the rights of another person in the goods.
- In the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind.
- A person buys goods in the ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller's own usual or customary practices."
For examples of use of the term in a bankruptcy context, antitrust context, and corporate context, respectively, see Standard Document, Unpaid Ordinary Course of Business Expenditures; Practice Note, HSR Act: Rule 802.1 Ordinary Course Exemption; and Standard Document, LLC Agreement (Operating Company): (h) Enter into or effect any transaction or series of related transactions involving the purchase....