What does it mean for a contract to be "legally binding"?

A contract being described as "legally binding" indicates that it is enforceable by law, meaning that the parties involved are obligated to fulfill their contractual duties as outlined within the agreement. This enforceability provides a legal framework that allows for the enforcement of the terms of the contract in a court if one party fails to meet their obligations.

While there are scenarios where contracts need to be written or signed to be enforceable (as mentioned in one of the other options), legally binding contracts can also be verbal or implied, depending on the circumstances and the nature of the agreement. The essential factor is the mutual consent of the parties to create obligations that can be legally upheld. Therefore, the correct characterization of a legally binding contract centers on the enforceability and the obligations arising from it.