What do children do when they do not want to obey but cannot afford to disobey? Might they, like adults, feign misunderstanding and seek out loopholes? Across four studies (N = 723; 44% female; USA; majority White; data collected 2020-2023), we find that loophole behavior emerges around ages 5 to 6 (Study 1, 3-18 years), that children think loopholes will get them into less trouble than non-compliance (Study 2, 4-10 years), predict that other children will be more likely to exploit loopholes when goals conflict (Study 3, 5-10 years), and are increasingly able to generate loopholes themselves (Study 4, 5-10 years). This work provides new insights on how children navigate the gray area between compliance and defiance and the development of loophole behavior across early and middle childhood.