What is meant by the term "specific performance" in real estate?

The term "specific performance" refers to a legal remedy that compels parties to fulfill their contractual obligations as agreed upon in a contract, particularly in real estate transactions. In the context of real estate, when a buyer and seller enter into a contract for the sale of property, if one party fails to perform their duties as specified in the contract, the other party may seek specific performance through the courts. This remedy is often pursued because real estate is considered unique; thus, monetary damages may not suffice to compensate the injured party. Specific performance effectively enforces the actual execution of the contract, requiring the defaulting party to complete the sale rather than simply paying damages. This enforcement of contract terms makes specific performance a critical aspect of real property law, especially when unique assets are involved.

The other options do not accurately capture the essence of specific performance. A financial penalty pertains to breach but does not compel fulfillment of the contract itself; a type of property title transfer neither describes a remedy nor addresses party obligations; and a non-enforceable agreement refers to contracts that cannot be legally enforced, which is contrary to the purpose of seeking specific performance.