Microsoft Laws for Selling Used Computers - Questions

[FeCobalt]

New to the computer business here I was curious about the laws regarding selling used computers with Windows software already loaded so I googled it and found a bunch of conflicting information and it just kind of sparked my interest even more since I want to sell them legally. I found some information here on technibble as well but I just wanted a little bit more clarification. It appears that Microsoft's laws tend to change over time and it's a bit confusing to me. So I have a few scenarios laid out and was wondering if someone knowledgeable on the subject could tell me whether they think these scenarios are legal or not:


1) Can I legally sell a used computer with Windows already on it with a valid COA without the Windows reinstallation DVD if I have not reinstalled Windows ever? (meaning the hard drive was never formatted and the computer may have some old information from the previous user on it?)

2) Can I legally sell a used computer with Windows on it if I’ve reformatted the computer and reinstalled Windows fresh and have accepted the EULA myself and am including the COA but am not including the Windows recovery/reinstallation disk?

3) Can I legally sell a used computer with Windows on it if I've reformatted the computer and reinstalled Windows fresh and have accepted the EULA myself and am including the original Windows recovery disk and COA?

4) Can I legally sell a used computer with Windows on it if I’ve reformatted the computer and reinstalled Windows fresh, but have not gone through the initial setup so the new user can accept the EULA themselves, and I am also including the original Windows recovery disk and COA?

5) For computers that have been upgraded to Windows 10 from Windows 7… if I’ve reformatted the computer and reinstalled Windows 10, do I need to include any reinstallation DVD? Because at that time it will have the “product key or COA” for Windows 10 embedded in the motherboard (digital entitlement) and will also have the COA for Windows 7 under the battery compartment. Plus, Windows 10 can be downloaded to USB for free from Microsoft online so the next owner can get it anyways so I don’ t know if I need to include a Windows 10 disk. I don’t know for sure what Microsoft would want in that situation. Maybe they still want me to include the original Windows 7 recovery disk since that is what the laptop came with even though it now has Windows 10 installed from the free upgrade? Can someone advise on this unique situation please, it’s the most confusing one to me.

6) For newer computers that originally came with Windows 10 on them, if I’ve reformatted the computer and reinstalled Windows 10, do I need to include any reinstallation DVD? Once again, Windows 10 can be downloaded from Microsoft for free so I’m not sure if a recovery disk is necessary. And the “COA” should be embedded in the motherboard so no physical sticker with a written key on it would be necessary I think. If a recovery disk is necessary, is it okay to include my personal USB drive with Windows 10 downloaded direct from Microsoft as the recovery disk instead of the original CD/DVD that came with the computer?

7) Are there ever situations where I don't need to legally include the original Windows reinstallation DVD with the sale of a used computer that has Windows loaded on it already? Like for Windows 7, 8, 10, etc.? If so, what situations allow me to legally exclude including a Windows reinstallation DVD with the sale of a used computer.

8)Are there ever situations where I can accept the EULA myself and then legally sell the computer to a new owner so they don't have to go through the inital setup? The issue with this is the new owner will not get to accept the EULA though


Sorry for the long post. I just want to know what is legal and what isn’t. As you can tell I’m a bit anal about this stuff and just want to try to follow the rules. Helps me sleep a bit easier at night, lol. Thanks in advance for any information on this subject.

 

[Markverhyden]

Microsoft has no laws nor can they make any. Laws about selling computers depend on where it's being it's being sold as well as delivered and whether it's new or used. Software is a totally different animal. Software OEM's protect their IP with copyrights. One does not buy the software, they pay a licensing fee to use it. At all times the ownership of the software remains with the author (OEM). They determine how that licensing is handled. Also read up on the Microsoft Refurbisher Program as that will help understand things. Thee are plenty of threads on that as well on here.

As far as your questions. This subject matter has been discussed many, many times. Make an effort to read through the past threads as answers to all your question, plus many more, will probably be there. Just search using terms like "Windows Licensing", "Microsoft Licensing", etc.

 

[FeCobalt]

Ok thanks for the reply, I appreciate it. That sounds good to me, I will look through the threads a bit more then. I believe after reading through some threads on Technibble today, I do know the answers to the above questions but was just wanting to get further confirmation since I'm so particular about everything and pretty OCD about this stuff, haha. Ok, thanks again.

 

[Diggs]

[QUOTE="FeCobalt, post: 626580, member: 124667"I'm so particular about everything and pretty OCD about this stuff, haha. Ok, thanks again.[/QUOTE]

Actually that's good. Much better than the "Pizza Tech" (a term you will quickly become familiar with) or worse way of looking at your business.

 

[Markverhyden]

Ok thanks for the reply, I appreciate it. That sounds good to me, I will look through the threads a bit more then. I believe after reading through some threads on Technibble today, I do know the answers to the above questions but was just wanting to get further confirmation since I'm so particular about everything and pretty OCD about this stuff, haha. Ok, thanks again.

Nothing wrong with wanting to stay on the right side of the line. But you have far bigger issues than this. There is much more to starting and running a IT service business. In addition to the Technibble Business Kit that @Barcelona mentioned @Your PCMD wrote up a nice business plan outline to use. Don't need to worry about things that may be way off, like employees. Depending on where you are you might have a local SCORE chapter which can also be of assistance. Best of luck!

 

[MichaelBits]

1) Can I legally sell a used computer with Windows already on it with a valid COA without the Windows reinstallation DVD if I have not reinstalled Windows ever? (meaning the hard drive was never formatted and the computer may have some old information from the previous user on it?)

Just to point out...
That is something you should never do under any circumstance. Never sell something that still has someone else's data on it.

 

[Kitten Kong]

Just to point out...
That is something you should never do under any circumstance. Never sell something that still has someone else's data on it.

I wholeheartedly agree with @MichaelBits on this. That is one sure fire way of getting YOU in trouble.

ALWAYS remove all clients data from a machine before you even think of refurbishing it, and selling it on.

 

[Your PCMD]

Never sell something that still has someone else's data on it.

Totally agree. However, I never have this issue because being that hard drives are dirt cheap now-a-days (1TB drives can be had NEW for $30 here), I simply pull any drive and replace it with a brand new one - sale priced accordingly. Old drives are wiped and sent to a recycle facility where they are shredded, not refurbished.

 

[MichaelBits]

I simply pull any drive and replace it with a brand new one

Same.
I always put new HDD's in anything we sell. The only exception is occasionally we'll a system as used and not refurbished, in which case I just wipe it clean and reload it. I can only think of one I've even done that with, and it was loaded with Linux.

 

[FeCobalt]

Thanks for the information, much appreciated. Yes, I would never resell a computer with someone's personal information, but was more just curious about the legal stuff surrounding it. I'm kind of surprised that some of you mentioned that you have your old hard drives recycled/shredded instead of wiping them and using them again. I know that hospitals around here have to have their hard drives destroyed, but I would think for some other scenarios you can just wipe them and re-use the hard drive and save a bit of time and some money. But I can also understand that an older hard drive may have bad sectors/etc. and may just cause some issues for the new owner and then you may have to deal with a return also. Is the main reason you guys replace the hard drives with new ones is to increase the reliability of the computer?

 

[MichaelBits]

I generally don't consider it good practice to use used HDD's (in systems being sold). Even if the drive tests fine and the SMART looks good, you're just asking for a headache later.

HDD's are generally cheap, no reason not to use new drives.

The first customer you have that comes back and says their HDD failed in the computer you just sold them and they lost all their data, you will regret not using new drives. Saving that few bucks is not worth the potential catastrophe.

You can re-purpose old drives though. For instance I'll use tested good used drives for in shop use. I'll use them to keep backups stored of certain data or programs. I'll use them for simple data transfers.
I'll even open them up and remove the magnet inside. They're strong magnets and I'll use them for various fun things.

Otherwise all hard drives get wiped/recycled/shredded. You never want to take the chance some of your customer data on those drives gets stolen by someone or just gets copied by someone being a snoop. Many of the drives we recycle may have important financial information for individuals or businesses, possibly medical data, or other sensitive information you should make it your responsibility to guard like it's a lump of gold.

 

[pcpete]

On a side note we have have not replaced any old hard drive with a new one in years, only use SSDs as replacements

 

[pcpete]

I personally think it is criminal that MS leans on shops to buy a new license when a computer is resold

 

[Markverhyden]

I personally think it is criminal that MS leans on shops to buy a new license when a computer is resold

I'm by no means a fan of the monopoly tactics that many OEM's use. But the concept of leasing, not buying, software existed Bill Gates was even born. The copyright holder makes the rules and there is little that anyone can do about it.

And let's play devil's advocate. Would you want someone else ordering you how to run your business? Telling you what you can and cannot do with ideas and intellectual property that you came up with?

 

[fincoder]

Would you want someone else ordering you how to run your business? Telling you what you can and cannot do with ideas and intellectual property that you came up with?

There are plenty of areas where regulations and laws limit business activity, and also some legal statements and contracts can be found to be invalid when challenged in court, so the judiciary can already order a company to run a business a certain way.

Our businesses are already subject to regulations and laws, e.g. in Australia we have very strong consumer laws that mean a supplier of goods (e.g. retailer) must refund a product if it has a major fault for a period of time that a reasonable person would expect. And to make it worse this law doesn't apply to wholesale purchases for resale. So a small retailer could easily be put out of business if forced to refund without support from their distributor.

So there's no reason that software licenses can't be regulated more heavily. It could even help the market and allow smaller players to emerge.

 

[sapphirescales]

I'm by no means a fan of the monopoly tactics that many OEM's use. But the concept of leasing, not buying, software existed Bill Gates was even born. The copyright holder makes the rules and there is little that anyone can do about it.

And let's play devil's advocate. Would you want someone else ordering you how to run your business? Telling you what you can and cannot do with ideas and intellectual property that you came up with?

I agree, however the difference here is that a computer is basically worthless without Windows. It came with Windows from the factory, and forcing a repurchase of that same license is ridiculous. Sure, you can say that you can run Linux, but no "normal" person is going to want to run Linux. Selling a computer without Windows is like selling a lamp without any wiring inside of it. Just because you can shove a candle into the light socket (Linux) doesn't make it a lamp. Microsoft forcing you to re-buy Windows is like lamp manufacturers forcing you to gut the lamp and rewire the whole thing in order to resell it. It makes absolutely no sense.

 

[pcpete]

I'm by no means a fan of the monopoly tactics that many OEM's use. But the concept of leasing, not buying, software existed Bill Gates was even born. The copyright holder makes the rules and there is little that anyone can do about it.

And let's play devil's advocate. Would you want someone else ordering you how to run your business? Telling you what you can and cannot do with ideas and intellectual property that you came up with?

When you buy a computer, it is implied that you own it and do not have keep making payments to use it. It is implied that the license is attached to the computer. Threatening to shut your business down if you don't collect extra money to resell a product seems shady.