Ordinary Course Of Business Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Ordinary Course Of Business, written in plain English, along with examples of how it is used.

What is Ordinary Course Of Business?

History and Meaning of Ordinary Course Of Business

Ordinary Course Of Business is a legal term that has its roots in the Uniform Commercial Code (UCC) as it pertains to commercial transactions. In simple terms, it refers to the usual and customary practices that a business follows when conducting its day-to-day operations. These practices may include purchasing raw materials, paying bills, hiring employees and contracting with suppliers. The ordinary course of business is important in bankruptcy proceedings because it helps determine whether or not a debtor was engaged in fraudulent activities.

Examples of Ordinary Course Of Business

• A coffee shop that purchases coffee beans weekly from a distributor in the same city it is located.
• An e-commerce business that routinely restocks products from the manufacturer or distributor they work with.
• A residential property management company that uses a standard lease agreement and accepts rent payments on a monthly basis.

Legal Terms Related to Ordinary Course Of Business

Here are a few legal terms that relate to Ordinary Course Of Business:

• Fraudulent Transfer: This is a transfer of property made by a debtor with the intent to defraud, hinder, or delay the creditors of the debtor.
• Preferential Transfer: This is a transfer of property made by a debtor to one creditor at the expense of other creditors, while the debtor is insolvent.
• Bankruptcy: A legal process that helps people or businesses get relief from their debts and repay their creditors in an organized way.
• Debtor: A person or entity that owes money to another person or entity.
• Creditor: A person or entity to whom money is owed by another person or entity.