What caught my eye here is the expert handling of procedures for consumer disputes.

In legalese, this can be summed up as follows: if you live in the U.S., you agree to binding arbitration and to waive any right to participate in a class action (Section 10); before you can initiate arbitration, you are required to give a notice of dispute to Microsoft and to go through a 60-day period of trying to resolve it informally (10.1); nothing in this arrangement prevents you from taking your dispute through small claims court at any time in lieu of arbitration and whether or not you went through informal negotiations first (10.2); if informal negotiation fails or if you do not use small claims court, you agree to give up your right to litigate your dispute before a judge or jury and to pursue your claims exclusively through binding arbitration under AAA rules (10.3); you agree that your claim will be resolved exclusively "on an individual basis" and that it will not be combined with other claims, either in arbitration or in the courts, where a party acts as a representative in a class action (10.4); you agree that the arbitrator can only grant remedies besides a money award (e.g., injunctive relief) only to the extent required to satisfy your individual claim (10.5); if you are an individual and you use the services for personal or household use, or if the value of the dispute is $75,000 or less whether or not you are an individual, your dispute will be resolved under the AAA's special simplified-procedure rules for consumer-related disputes (10.5); you are required to initiate your dispute with AAA either in your county of residence or in King County, WA and Microsoft will promptly reimburse you for your filing fees and will pay for the arbitrator's fees and expenses (10.5, 10.6); in the case of such small disputes, if you reject Microsoft's last written offer made before the arbitrator was appointed and thereafter get a better result when an award is made, Microsoft will pay the greater of the award or $1,000, will pay twice your reasonable attorneys' fees, and will reimburse you for expenses that your attorney incurs in preparing and proving the your claim through arbitration (normal AAA rules on these issues apply if your claim exceeds $75,000) (10.6); in turn, Microsoft will ask for reimbursement of the arbitrator's fees and expenses only if the arbitrator finds that your claim was frivolous or filed for an improper purpose (10.6); all claims are subject to a private statute of limitations expiring within one year (10.8).

Translated, here is what Microsoft is saying:

1. If you have a real problem with us as a consumer, we want to hear about it and deal with it if possible before you initiate a formal fight over it.

2. If we can't agree, we will give you every opportunity possible to make your case easily and without procedural barriers outside the regular court system, whether in small claims court or using streamlined AAA procedures in which we pay all the processing costs, including your filing fees.

3. If our negotiations with you yielded an offer from us that is less than what you get through a formal process, we will pay you even more, including double your attorneys' fees.

4. We will not play games with you by saying that arbitration can be held only on our home turf but will make certain that the prescribed procedures let you fight the battle in your local area, ensuring that you do not face arbitrary obstacles in getting your claim decided.

Whether one agrees with the approach or not, the message here is loud and clear: if you deal with Microsoft as a consumer, there will be no juries (i.e., no realistic chances of getting punitive damage awards), no claims by which lawyers try to get nuisance payouts by grinding little claims through the formal court system, no arbitrations by which lawyers try to use complex discovery, etc. to arbitrarily complicate what should be an otherwise straightforward claim, no class actions (either in court or through attempts to aggregate claims in arbitration), and no broad injunctive or declaratory relief remedies that might disrupt an existing business model.

Many large companies have tried to use binding arbitration to corral consumers into little boxes from which they can only fight at an unfair disadvantage. Perhaps Microsoft is trying to do the same thing here in reality but I doubt it. I read this as Microsoft's declaring, in effect, "we have no problem dealing honestly with real complaints about our service but we're sure not about to let ourselves get set up to pay large awards over inflated claims concocted by lawyers - and we are ready to pay a price directly to the aggrieved consumer (e.g., expense reimbursement, attorneys' fees) for the privilege of being free of the mess that is our modern court system."

Sorry to bore people with legalese but this approach is actually quite innovative and worthy of note and I just thought I would highlight it.

As to format, it is helpful when this is improved but a contract is a contract and, when it has to cover all sorts of potentially complex legal possibilities for services offered throughout the U.S. and the world, it can only be simplified so much. It can be made clean and clear in its wording - and that is what makes for deft handling from the lawyer side - but, in the end, reading a complex Terms of Service agreement will always remain somewhere between a visit to the dentist and having to read through a 10-page 6-point-type insurance policy in terms of how we can relate to it. That is just a fact of life, unfortunately.