What type of legal action is taken to compel a party to fulfill the terms of a contract?

The correct response is the suit for specific performance, which is a legal remedy where a court orders a party to fulfill their obligations according to the terms of a contract. This is particularly relevant in situations where monetary damages would not adequately resolve the issue, such as in contracts involving unique goods or real estate where the subject matter is not easily replaceable.

For instance, if a seller agrees to transfer ownership of a unique property and later tries to back out of the deal, the buyer can file a suit for specific performance to compel the seller to complete the transaction as originally agreed. This remedy underscores the principle that each party's performance is essential and that fulfilling contract terms is crucial, especially when the contracted item has special significance or value.

Other forms of legal action listed, such as a suit for damages, focus on compensating the injured party rather than enforcing the contract, an injunction prevents an action rather than compelling it, and a declaratory judgment provides a legal determination of the parties' rights but does not compel performance. Therefore, suit for specific performance precisely addresses the need to compel a party to adhere to their contractual obligations.