What is meant by "specific performance" in real estate law?

In real estate law, "specific performance" refers to a legal remedy whereby a court mandates that a party fulfill their contractual obligations as specified in a contract. This is particularly relevant in real estate transactions where the subject matter is unique, such as with a specific piece of property. The rationale for this remedy is that monetary damages may not suffice to address the loss suffered by the non-breaching party when the property in question has unique characteristics or sentimental value.

For instance, if the seller backs out of a sale agreement for a specific property, the buyer may seek specific performance to compel the seller to complete the sale rather than just seek damages. This option is typically pursued when the property cannot be easily replaced or the buyer has a compelling need to acquire that particular property.

The other options do not accurately capture the nature of specific performance. Compensation for damages involves financial reimbursement, rather than enforced completion of a contract. An agreement to terminate a contract refers to dissolving obligations without further appeal, while a type of insurance for property loss protects against unforeseen events rather than enforcing contract terms.