Agency

In New York, which of the following best describes the duty of 'obedience' in a fiduciary relationship?

AThe agent must follow all instructions from the principal, including illegal ones
BThe agent must promptly and faithfully follow the lawful instructions of the principal✓ Correct
CThe agent must obey all requests from prospective buyers
DThe agent must defer to the broker on all decisions

Explanation

The fiduciary duty of obedience requires the agent to follow the lawful instructions of the principal promptly and faithfully. The key limitation is 'lawful' — an agent must refuse instructions that are illegal (such as fair housing violations) or unethical.

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