This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The board of directors, acting at lawful meetings, is the chief agency for directing and controlling the business of the corporation.1 The acts of such board at a lawful meeting bind the corporation though no formal resolution to make the contract in question is adopted.2 The fact that no written record of the proceedings of the board of directors is kept does not prevent their conduct from binding the corporation.3 This power must, however, be exercised at lawful meetings. A single member of the board of directors has not as such any implied power to bind the corporation ;4 nor have any number of members acting individually,5 even if they amount to a majority of the board.6 The board of directors is necessarily a body meeting only occasionally, and accordingly it has been held that it may delegate its power to a smaller committee of its own members, often known as the "executive committee."7
1 Crossette v. Jordan, - Mich. -; 92 N. W. 782; Burke v. Sidra Bay Co., 116 Wis. 137; 92 N. W. 568.
2 Elyton Land Co. v. Dowdell, 113 Ala. 177; 59 Am. St. Rep. 105; 20 So. 981.
3 Nebraska, etc., Bank v. Ferguson, 49 Neb. 109; 59 Am. St. Rep. 522; 68 N. W. 370.
4 Jones v. Williams, 139 Mo. 1; 61 Am. St. Rep. 436; 37 L. R. A. 682; 39 S. W. 486; 40 S. W. 353.
1 Mahoney Mining Co. v. Bank, 104 U. S. 192; Aliunde Consolidated Mining Co. v. Arnold,
Colo. App. - ; 67 Pac. 28; Eastern R. R. v. R. R., 1ll Mass. 125; 15 Am. Rep. 13; Trephagen v. South Omaha, - Neb. - ; 96 N. W. 248; Beveridge v. R. R., 112 N. Y. 1; 2 L. R. A. 648; 19 N. E. 489; Bradford Belting Co. v. Gibson, 68 O. S. 442; 67 N. E. 888; Columbia, etc., Co. v. Transportation Co., 32 Or. 532; 52 Pac. 513; Wright v. Lee, 2 S. D. 596; 51 N. W. 706; Murray v. Beal, 23 Utah 548; 65 Pac. 726.
2 Salem Iron Co. v. Iron Mines, 112 Fed. 239; 50 C. C. A. 213; Columbia, etc., Co. v. Transportation Co., 32 Or. 532; 52 Pac. 513.