Protein-ligand interaction detection without disturbances (e.g., surface immobilization, fluorescent labeling, and crystallization) presents a key question in protein chemistry and drug discovery. The emergent technology of transient induced molecular electronic spectroscopy (TIMES), which incorporates a unique design of microfluidic platform and integrated sensing electrodes, is designed to operate in a label-free and immobilization-free manner to provide crucial information for protein-ligand interactions in relevant physiological conditions. Through experiments and theoretical simulations, we demonstrate that the TIMES technique actually detects protein-ligand binding through signals generated by surface electric polarization. The accuracy and sensitivity of experiments were demonstrated by precise measurements of dissociation constant of lysozyme and N-acetyl-d-glucosamine (NAG) ligand and its trimer, NAG3. Computational fluid dynamics (CFD) computation is performed to demonstrate that the surface's electric polarization signal originates from the induced image charges during the transition state of surface mass transport, which is governed by the overall effects of protein concentration, hydraulic forces, and surface fouling due to protein adsorption. Hybrid atomistic molecular dynamics (MD) simulations and free energy computation show that ligand binding affects lysozyme structure and stability, producing different adsorption orientation and surface polarization to give the characteristic TIMES signals. Although the current work is focused on protein-ligand interactions, the TIMES method is a general technique that can be applied to study signals from reactions between many kinds of molecules.