Which of the following describes a binding agreement where both parties have outlined their commitments?

A binding agreement where both parties have outlined their commitments is best described as a contract. A contract involves mutual assent and specific terms that detail the obligations of each party involved. It is a legally enforceable agreement that requires consideration—something of value exchanged between the parties.

In contrast, an understanding typically refers to a more informal or non-legally binding arrangement and lacks the critical components that make an agreement enforceable in a court of law. Negotiation refers to the process of discussing terms and conditions before reaching an agreement, and is not itself an agreement. A promise, while it can imply a commitment, does not necessarily include the legal enforceability and detailed specifications that characterize a contract. Thus, recognizing that a contract is a formal agreement outlining clearly defined commitments helps establish its legal significance and enforceability compared to the other options presented.