Also known as: ordinary courses · ordinary course of business
Written by attorneys · grounded in primary & secondary sources — see below
Routine activities undertaken in the normal operation of a business or entity. An act falls within ordinary course when it aligns with the entity's established practices and does not require special authorization or deviate from typical operations.
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Oceanview Properties purchased office furniture from a dealer that had granted a security interest to its lender. The purchase occurred during the dealer's regular retail sales to the public. Oceanview Properties took the furniture free of the lender's security interest even though the interest was perfected.
Orbit Communications members voted by majority to lease additional warehouse space for storing equipment used in daily operations. The lease fit within the company's established pattern of expanding storage as customer demand grew. No unanimous consent was required because the transaction stayed inside ordinary course activities.
Odin Obeng, a general partner in Odyssey Logistics, sold several used delivery vans to a regular customer. The sale matched the partnership's longstanding practice of cycling out older vehicles. The limited partnership became bound by the contract without needing unanimous partner approval.
Oliver Okeke signed a supply agreement for fuel in the partnership's name while operating a trucking business. The purchase followed the exact pattern of prior fuel contracts the partnership had made for years. The agreement bound the partnership because it was apparently for carrying on business in the ordinary course.
Osprey Aviation responded to a subpoena by delivering email files exactly as they were stored on its servers. The production followed the company's standard record-keeping practices without any reorganization. The recipient satisfied the production obligation by maintaining the files in ordinary course format.
Ophelia O'Brien contracted to buy seasonal inventory from Oscar Ortiz. A routine drop in demand after the holiday period caused the goods to lose value. The loss qualified as one that would occur in the ordinary course of events for purposes of measuring damages.
An act stays inside ordinary course when it matches the entity's established pattern of operations and does not introduce new lines of business or require unusual capital commitments. Acts that change the fundamental nature of the enterprise, such as moving from design consulting to manufacturing, fall outside ordinary course and require unanimous consent.
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Yes. Under the governing rule a buyer in ordinary course takes free of a security interest created by the seller even if the interest is perfected and the buyer knows of its existence, provided the buyer is not purchasing farm products from a farming operation.
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A distribution is prohibited if, after it is made, the partnership would be unable to pay its debts as they become due in the ordinary course of its activities. Evidence of existing delinquencies and thin working capital shows the partnership cannot meet maturing obligations after the distribution.
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The responding party must 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. Production in native format without reorganization satisfies the requirement when that format matches the entity's regular record-keeping practices.
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Damages that would arise in the ordinary course of events are recoverable without special proof of foreseeability. Losses stemming from routine market fluctuations after a contract breach therefore count as ordinary-course damages.
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