The EULA was written by lawyers, and it as comprehensible to normal people as are most things written by lawyers.  This page attempts to answer some typical questions about the EULA and how it governs what you can and cannot do, under the terms to the EULA.

Note: This Q & A does NOT apply to copies of Office that were obtained under either

Subscription Service arrangements, or
Volume Licenses
 

These questions and answers are intended for home and small business users. If you have a subscription service or volume license for Office, you should contact your MS Sales Office.  Also, these questions and answers apply to United States versions of Office.  The EULA may be different in other countries.

NOTE: I am not a lawyer, and this page isn't legal advice. This page is nothing more than a series of questions and answers in layman's terms.  It is accurate to the best of my knowledge.

First, some important terms:

Office
The Microsoft Office family of software products, such as Excel, Word, PowerPoint, etc.  Unless specified otherwise "Office" applies to the collection as a whole, as well as to the individual programs separately.

Retail Copy
A Retail Copy of Office (or one of its constituent programs such as Excel) is one that you purchased from a retailer such a CompUSA or OfficeMax.   It came in a box, with some CDs and a some paperwork. You installed it on your PC yourself. Note that "retail copy" and "OEM" are mutually exclusive terms.

OEM (Original Equipment Manufacturer) Copy
An OEM Copy of Office is one that came pre-installed on your the PC you purchased.  Office was already there, installed by the manufacturer or vendor, the first time you turned on the computer.  You may or may not have received any CDs.  Note that "retail copy" and "OEM" are mutually exclusive terms.

Full Version
A Full Version of Office is a version that can be installed on a computer that does not have any other version of Office installed.  Note that "full version" and "upgrade version" are mutually exclusive terms.

Upgrade Version
An Upgrade Version of Office is a version that is installed on a computer that already has an existing copy of Office.  An Upgrade Copy will, for example, install Office XP on a computer that already has Office 2000 installed.  You cannot install an Upgrade Version on a computer that does not have Office already installed. For all purposes, an Upgrade Version and the original Full Version (either Retail Copy or OEM Copy) that it upgrades are considered a single product, and cannot be separated.

Questions And Answers
 

What is the EULA?
The EULA or End User License Agreement is the legally binding contract between you and Microsoft.  This agreement governs how you may use, install, and dispose of Office.  When you installed Office, or when you ran one of the Office programs for the first time, you were presented with the EULA in a dialog, and you were asked to click "I Agree" or "I Do Not Agree".  When you clicked "I Agree", you agreed to abide by the EULA.  The EULA is a binding legal contract between you and Microsoft. 

Where can I read the EULA?
The EULA is in the online help files for all Office applications.  Open up one of the programs, such as Excel, and look in the Contents tab for "End User License Agreement".

Just what did I purchase when I bought Office?
You bought, and you own, the physical media -- the CDs and some paperwork.  You also bought the rights (a license) to use the software in the manner outlined by the EULA. You may own the actual CDs, but you don't own the content (intellectual property) contained on the CDs.  You own the right to use that intellectual property in certain ways.  The ways in which you use that intellectual property are dictated by the EULA.

I bought a Retail Copy of Office and installed it on my PC.  Can I install it on my kid's PC, too?
No.  The EULA does not allow you to install Office on more than PC.  If you want to install Office on your kid's PC, you need to purchase another copy of Office.

I have an OEM Copy of Office that came with my new PC.  Can I buy the Upgrade version of Office and install it on my wife's machine?
No.  The Upgrade version can be installed only on a machine that already has Office, and it can be installed on only on PC (plus your own laptop).  So, if you and your wife each have full versions of Office 2000, you must purchase two Upgrade copies of Office 2002, one for each machine.

What do you mean by original machine? Does that mean I can't upgrade other hardware like my video card? Can I add more RAM?
When Office is installed it creates a "numerical profile" of that machine.  While the exact details of what makes up that "profile" are a closely held secret of Microsoft, it is designed such that you can upgrade the your computer without invalidating the "profile".  That is, you can add RAM, put in new video cards, hard drives, and all other hardware without invalidating the "profile". The general rule of thumb is that you can upgrade up to three hardware components at a time without invalidating the key.  If you do very substantial hardware changes, you may need to reregister Office with Microsoft.  To do this, use the telephone registration option, so that you can talk with a real live MS employee.  They are quite nice and accommodating. They will give you an activation code that will work.

I bought a Retail Copy of Office and installed it on my PC.  Can I install it on my laptop, too?
Yes.  You can install Office on your laptop as long as you are the exclusive user of the laptop.  This means that you can install it on your laptop, but not your wife's laptop. It is important to understand that the EULA allows you to install the second copy of Office on a portable device like a laptop, not just some any other PC.  In summary, you can install a retail copy on your desktop PC and your laptop.  It does not mean that you can install it on two desktop PCs.  You don't have the right to install it on two PCs.  You have the right to install it on one desktop PC and one of your own laptops.  Any other combination is not allowed.

I have an OEM Copy of Office and installed it on my PC.  Can I install it on my laptop, too?
No. The EULA is different for OEM copies of Office, and you cannot install an OEM Copy on your laptop, only if you are the only user of the laptop. The OEM copy of Office can exist only on the original PC on which it was installed. No laptops, no anything else.  OEM copies are strictly one machine only licenses.

Why is an OEM Copy of Office considered different than a Retail Copy of Office?
Because Microsoft provides copies of Office to computer manufacturers and vendors at a reduced price, and the vendor is supposed to pass those savings to you.  Most likely, the copy of Office that came with your computer cost you less than had you went to the store and purchased Office on your own.  Because you paid less, you have more limited rights.

I purchased Office 2002 Upgrade. Can I put my old version of Office 2000 on another PC?
No. The EULA considers the original Office 2000 and the Upgrade 2002 as a single product.

I have a Retail Copy of Office, and I purchased an additional PC. Can I install my copy of Office on my new additional PC?
No.  You'll have to purchase a new copy of Office.

I have a Retail Copy Of Office, and I replaced my existing PC. Can I install my copy of Office on my new replacement PC?
Yes. As long as Office was completely and entirely removed from the old PC, you can install your Office on your replacement computer. 

I have a OEM Copy Of Office, and I replaced my existing PC. Can I install my copy of Office on my new replacement PC?
No. An OEM copy are forever married to the PC on which it was originally installed.

Can I give my Retail Copy of Office to someone else?
Yes, as long as you completely and permanently remove Office from your computer, you can give it to someone else.

Can I give my OEM Copy of Office to someone else?
No. An OEM copy are forever married to the PC on which it was originally installed. You can't give it away. You can, however, give or sell the computer (including the Office software) itself to another party. 

My computer came with an OEM copy of Office.  I'm buying a new computer and I'm going to throw my old computer in to the river.  Can I install my existing OEM copy of Office on my new computer?
No. The OEM copy of Office is forever married to the machine on which it was originally installed.  It doesn't matter whether you have the disks.  That OEM copy is part and parcel of the original machine on which it was installed.

But what if I'm giving it to a non-profit organization or a school?
It doesn't matter.  You can't give away OEM Copies of Office to anyone. Again, though, you can give the computer itself away (including the Office software), but you can't give away just the software.  Under the EULA, the machine and the OEM Office are inseparable.

Both my wife and I have full retail copies of Office 2000.  Can I purchase a single upgrade version of Office XP and install it on both PCs?
No.  Both you and your wife must purchase separate copies of the Upgrade version.

Can I give my Upgrade Version of Office to someone else?
No. An Upgrade Version may be used to upgrade only a single PC (and a laptop, if the user of the laptop and the PC are the same person).

I have two or more PCs on a small home network. Can I install Office on one of these PC so users of the other PCs can use it?
No.  Each PC must have its own copy of Office.

Can I upgrade from Office 2000 to Office XP, and then install Office 2000 on another computer?
No. When you upgrade a version of Office, the original version of Office and the Upgrade become a single product.  Under the EULA, they are not two versions -- instead they "merge" into a single version. If you can't do it with the original version, you can't do it an upgrade.

Why doesn't Microsoft give me support on OEM Copies of Office?
Because Microsoft sold that copy of Office to the vendor at a substantial discount, with the understanding that the vendor would take care of tech support.  Whether the vendor passed those savings on to you, and whether they provide satisfactory support to you, are matters between you and the vendor.  The vendor got Office at a reduced price, and part of that bargain is that the vendor, not Microsoft, takes care of the end user.

So why is the EULA so restrictive?
Well, Microsoft spent a pile of money to develop Office, probably on the order of hundreds of millions of dollars. They have salaries to pay -- programmers don't like to work for free. While it may seem overly restrictive that you can't put the same copy of Office on both your computer and your wife's computer, the issue becomes more clear when you consider larger organizations.  It is clearly wrong for a company with 10,000 computers to purchase a single copy of Office for $500 and install that on all 10,000 computers. That represents a loss of revenue of a five million dollars.    In fact, many of the restrictions in the EULA are just extensions of legal restrictions that have applied to printed material for centuries.  You can go out and purchase the latest Tom Clancy novel, but you can't make ten copies of it and give it to ten of your friends.  This isn't an issue with printed material because it is a difficult and time consuming process to copy printed material. But copying software is trivially simple, and so things like the EULA were put in to force.