‘ORDINARY COURSE OF BUSINESS’ IN INVESTMENT AGREEMENTS: IS IT USEFUL DEFINING THE PHRASE? It is quite common to notice the phrase ‘ordinary course of business’, used across various investment and acquisition agreements. The phrase is used in VC/PE shareholder agreements to allow promoters/founders of investee companies the flexibility to operate without obtaining investors’ consent. Activities or business decisions that are in the ‘ordinary course’ are usually exempt from the requirements of obtaining investors’ permission. In acquisition and subscription agreements, the phrase is used across warranties to provide generic exemptions to the warrantors. Depending on the language of the warranty used, it could either be beneficial for the warrantors or the investor seeking the warranty. Often the phrase is defined with such subjectivity that it defeats the purpose of having a definition in the first place. In this context, it may be useful to understand the legal connotation of the