Which agent duty requires compliance with lawful instructions from the principal?

Prepare for the WGU ACCT3350 D216 Business Law Exam. Engage with flashcards and multiple-choice questions, each complete with hints and explanations. Ace your exam!

The duty of obedience requires that an agent follows the lawful instructions of the principal. This means that the agent must adhere to the directives given by the principal, as long as those instructions are legal and within the scope of the agency. By fulfilling this duty, the agent demonstrates respect for the principal's authority and ensures that the actions taken on behalf of the principal align with their wishes.

In the context of agency law, this duty is fundamental because it establishes the framework for the relationship between the principal and the agent. The principal relies on the agent to act in accordance with their directions, ultimately ensuring that the goals and intentions of the principal are pursued effectively.

While the other duties such as accountability, loyalty, and communication play crucial roles in preserving the integrity of the agent-principal relationship, they do not specifically address the requirement to follow lawful instructions. Accountability involves the agent's obligation to report back to the principal and maintain transparent records of transactions. Loyalty focuses on the agent prioritizing the principal's interests over their own. Communication pertains to keeping the principal informed about significant developments or decisions. However, none of these duties directly encompass the necessity of compliance with lawful instructions, which is why the duty of obedience is pivotal in agency law.

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