Define: Ordinary Course Of Business

The ordinary course of business refers to the customary or usual practices, transactions, and operations that are typical for a particular business or industry. It encompasses the regular activities and transactions conducted by a company as part of its day-to-day operations, such as purchasing inventory, selling goods or services, paying bills, and hiring employees. Determining whether a transaction occurred in the ordinary course of business is often relevant in legal contexts, such as bankruptcy proceedings, contract disputes, or fraudulent conveyance claims. Transactions conducted in the ordinary course of business are generally considered to be legitimate and valid, while those conducted outside the ordinary course may raise questions about their legality, validity, or propriety. Courts may consider various factors, such as the frequency, size, and nature of the transaction, as well as the parties’ customary business practices, in determining whether a transaction occurred in the ordinary course of business.

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This glossary post was last updated: 29th March 2024.