Previous approaches to economics often assumed that two contractually bounded firms will stick to the contract as they are supposed to.
A party to a transaction could be opportunistic by producing poor quality goods, delivering products late, or by not following through with provisions of a contract.
Williamson argued that the two most important dimensions of business behavior are the problems of imperfect competition and the propensity to act opportunistically.
Williamson (1975, 1985, 1986) argued that transaction-specific assets are non-redeployable physical and human investments that are specialized and unique to a task.
Basically, asset specificity refers to the extent to which a party is "tied in" in a two-way or multiple-way business relationship.
On the other hand, learning to speak Navajo, a rare Athabaskan language spoken in the southwest United States, could be highly asset-specific (human asset-specific, specifically), since your investment return (being able to communicate with others) is high with the few Navajo-speaking people, but almost zero otherwise.
Joskow's series of papers have looked at contract structuring in order to examine how contracts mitigate transaction costs inherent in a market based relationship Zaheer and Venkatraman (1994) acknowledge four asset specificity dimensions: site, human, physical, and dedicated assets.