Two different meanings of the word 'contract'
A smart contract, in the technical sense, is just code that executes automatically when its conditions are met: send this function the right inputs and it moves tokens, mints an NFT, or updates a balance. Nothing about that execution requires that a court, or anyone outside the blockchain, agree the outcome was fair, intended, or legally binding. A legal contract, in the sense courts have used for centuries, is a different thing entirely: an agreement that a legal system will recognize and enforce, typically because it finds an offer, an acceptance, mutual intent to be bound, and consideration exchanged between parties. Those two meanings share a word by coincidence more than by design, and conflating them is one of the most common and most consequential mistakes people make when reasoning about crypto legally.
This doesn't mean smart contracts can never be part of a legally enforceable arrangement, it means the code alone doesn't automatically make one. Courts in multiple jurisdictions have shown willingness to treat smart contract execution as evidence of what parties agreed to, especially when the code sits alongside clear off-chain signals of intent, like a written agreement, terms of service, or an identifiable counterparty who can be shown to have understood what they were agreeing to. What the code executes and what a court says the parties are legally entitled to can end up being the same thing, but that alignment isn't automatic, it has to be established the same way any contract's terms and validity get established: by looking at intent, context, and whether the normal requirements of contract law were actually met.