Final answer:
A binding contract is an agreement between a buyer and seller that outlines the sale terms and legally binds both parties. It plays a significant role in ensuring fair and competitive market practices.
Step-by-step explanation:
An agreement between a buyer and seller that outlines the sale terms and binds both parties is best defined as a Binding contract. When sellers and buyers participate in the market, they must understand the products and market conditions. Sellers offering identical products and the ability to enter and exit the market freely contribute to a competitive environment. Exclusive dealing agreements, for example, can either support or limit competition depending on their nature.