The terms of Microsoft's End User License Agreement (EULA) for its upcoming Vista operating system raises the conflict between two fundamental principles of contract law. The first, and more familiar, is that parties to a contract can generally agree to just about anything, as long as what they agree to doesn't violate the law and isn't "unconscionable".
The second principle is that the law generally disfavours the remedy of "self-help". That is to say that, if there is a violation of the terms of a contract, you usually have to go to court, prove the violation, and then you are entitled to damages or other relief.
The terms of the Vista EULA, like the current EULA related to the Windows Genuine Advantage, allows Microsoft to unilaterally decide that you have breached the terms of the agreement, and they can essentially disable the software, and possibly deny you access to critical files on your computer without benefit of proof, hearing, testimony, or judicial intervention.
In fact, if Microsoft is wrong, and your software is, in fact, properly licensed, you probably will be forced to buy a license to another copy of the operating system from Microsoft just to be able to get access to your files, and then you can sue Microsoft for the original license fee. Even then, you wont be able to get any damages from Microsoft, and may not even be able to get the cost of the first license back.
Product activiation in the Vista license
Suppose you buy a new computer after January 2007, or purchase an early upgrade for one of the various flavors of Vista. The first problem is, you may think you bought a copy of the operating system. Actually, the OS is still owned by Microsoft. You may own a physical DVD, but what you have "bought" is the right to use the software subject to any of the terms and conditions of the End User License Agreement (EULA), which you may or may not have access to at the time you buy the computer or disk.
Typically, the EULA will be contained in micro-print on the outside of a DVD, or may be on a splash screen that prompts you to unequivically declare, "I agree..." as a condition precedent to installing or booting the software. Courts have pretty much established that this manner of acquiescence is okay, provided there is some way for you to get your money back if you don't agree to the EULA.
The Vista EULA informs the licensee that Vista will automatically send information about the version, language and product key of the software, the user's Internet protocol address of the device, and information derived from the hardware configuration of the device.