Also known as: ordinary business operation · ordinary course of business
Written by attorneys · grounded in primary & secondary sources — see below
Routine activities undertaken by a business or partnership in its regular affairs. An act falls within ordinary business operations when it aligns with the entity's customary practices and does not require unanimous partner consent or special authorization.
Overland Transport sold a used trailer to Orion Technologies. Orion paid value, took possession, and had no actual knowledge that Mountain Port held a perfected security interest. Because the sale followed Overland's occasional practice of disposing of used equipment, Orion qualifies as a buyer in ordinary course and takes the trailer free of the security interest.
Orlando Okafor, a partner in Orbit Communications, negligently approved a vendor contract during a routine client meeting. The error caused a client to suffer losses. Because the approval occurred while Orlando acted in the ordinary course of the partnership's business, the partnership is liable for the resulting damages.
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Octavia Okonkwo served a subpoena on Orchard Farms seeking payroll records for specific months. Orchard Farms produced a single unlabeled CSV file containing all employee data. Because the file did not reflect how Orchard Farms keeps records in the ordinary course of business, the court ordered the company to organize and label the production to match the subpoena categories.
Omar Olson and two other partners in Overland Transport voted to purchase replacement tires for the fleet. The purchase aligned with the company's regular maintenance schedule. Because the decision concerned a matter in the ordinary course of business, the majority vote bound the partnership without requiring unanimous consent.
Olive Okafor and other investors sued suppliers who structured transactions with a cable company. The suppliers' conduct occurred entirely within the company's ordinary business operations and was not disclosed to the public. The court held the acts too remote to support a federal securities claim against the suppliers.
Oakley Osei, a supervisor at Orion Technologies, made unwelcome advances toward a subordinate during a standard performance review. The conduct occurred while Oakley exercised authority in the ordinary course of supervising employees. The company faces potential vicarious liability for the supervisor's actions.
A buyer qualifies when purchasing from a seller in the business of selling goods of that kind, paying value, and acting in good faith without actual knowledge that the sale violates a security interest. The sale must also comport with the seller's usual or customary practices.
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A partnership is liable when the partner acts in the ordinary course of the partnership's business or with actual or apparent authority. The partnership faces liability even if the specific act was unauthorized, provided it occurred within the scope of routine operations.
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The respondent must either produce documents as they are kept in the ordinary course of business or organize and label them to correspond to the categories in the demand. An undifferentiated data dump that does not mirror actual business files fails both options.
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Acts outside the ordinary course of business and amendments to the partnership agreement require unanimous consent. Routine operational matters may be decided by majority vote.
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…notes secured by an assignment of accounts receivable, or a note which simply formalizes an open-account debt incurred in the ordinary course of business (particularly if, as in the case of the customer of a broker, it is collateralized)"); Chemical Bank, supra , at 939 (adding to list "notes evidencing loans by commercial banks for current…