Also known as: duties to obey · obligation to obey · duty of obedience
Written by attorneys · grounded in primary & secondary sources — see below
A fiduciary duty requiring an agent to follow the principal's reasonable directions about the manner of performing the contracted service. The duty applies unless the parties have agreed otherwise or the agent is privileged to protect interests of the agent or another. Breach occurs when the agent substitutes personal judgment for the principal's explicit instructions on a matter within the scope of the agency.
Ridgeview Advisory hired Lina to manage Omar's portfolio under a written agreement directing her to invest only in low-risk bond funds. Lina unilaterally shifted thirty percent of the assets into higher-yield stock funds because she believed market conditions justified the change. Ridgeview sued Lina after discovering the deviation.
Premier Structures hired Dylan as on-site project manager and directed him in writing that overtime required prior written approval from senior management. Facing an imminent inspection deadline that would trigger penalties, Dylan authorized night and weekend work without seeking approval. Premier Structures later sued Dylan after learning of the unauthorized overtime.
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Yes. The duty requires compliance with the principal's reasonable directions even when the agent believes a different course would produce better results for the principal. The rule focuses on adherence to the principal's stated instructions rather than the agent's independent assessment of outcomes.
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An agent may disregard a direction only when privileged to protect the agent's own or another's interests or when the direction is unreasonable, unlawful, or outside the scope of the agency. A subjective belief that deviation will benefit the principal does not automatically trigger the privilege.
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Yes. An independent contractor who has agreed to act on the principal's behalf in a fiduciary capacity remains subject to the duty to obey reasonable directions about how to perform the agreed service.
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No. The duty attaches to reasonable directions whether oral or written, provided the parties have not agreed otherwise and the directions concern the manner of performing the contracted service.
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