DEFINITION of 'Duty'

1. A tax levied on certain goods, services or transactions. Duties are enforceable by law and are imposed on commodities or financial transactions, instead of individuals.

2. The obligation of a person in authority, such as a fiduciary, to fulfill the responsibilities of his or her position.

BREAKING DOWN 'Duty'

1. Duties may be revoked in certain situations, such as an airport's duty-free shop. At a duty-free shop, commodities that are usually taxed, like cigarettes and alcohol, will not have a duty levied on them. Foreign visitors will then be able to purchase the goods at a lower price compared to domestic citizens.

2. The chief executive officer of a company has a fiduciary duty to the company's shareholders. This means that any course of action the CEO takes should be in the best interested of the shareholders.

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