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MetroHarvest, Inc. has a five-member board. Its bylaws require three directors for a quorum and majority approval of directors present at a meeting. The corporation's chief operating officer has signed ordinary supply contracts up to $250,000 for years without specific board votes.
At a charity dinner, two directors told the COO that the company "should lock down more warehouse space before prices rise." The next morning, without notice to the other directors and without a board meeting, the COO signed a seven-year, $9 million warehouse lease with Landlord. Landlord knew the COO's title and knew that the corporation had previously leased smaller facilities through the COO, but Landlord did not ask for a board resolution. When the full board learned of the lease, three directors voted to reject it.
Is MetroHarvest bound by the lease? Discuss the possible bases for authority and the strongest arguments for each side.