First off, I Am Not A Lawyer And This Is Not Legal Advice. If you go to Microsoft (or to anyone) and say ‘but this law student on a blog told me so’ then you will be laughed out of the room, or sued, or both, and you’ll deserve it. :)
Mike Shaver blogged early this month about Microsoft’s new tactics in the HTML5 discussion– basically, that ‘we can’t do that because our customers will sue us for not being backwards compatible.’
I should start by saying this is not completely implausible. If your sales guys told your customers ‘this will always be compatible until the end of time’, or your sales contract said the same, then yes, you could possibly be sued for violating the terms of the contract under either circumstance. And of course (especially with large customers) contracts may not be the standard ones we’re used to seeing- months or years of salesmanship and legal work can go into such deals, with extensive custom promises and clauses involved. Without knowing exactly what was said, and/or exactly what contracts were signed to, it is impossible to know whether or not Microsoft’s claims have merit- reading their standard EULA terms would be insufficient.
Note that Mike asks specifically about EULAs; I’ve specifically mentioned sales guys as well as EULAs/contract because in some cases/states/jurisdictions/etc., verbal commitments not reflected in the contract can be interpreted as part of the contract. This is generally not the case, and in fact a well-written contract will go to great pains to ensure that this is not the case. But despite such efforts, sometimes those verbal terms can make their way into court- which makes answering a question like this with a simple ‘yes or no’ even more difficult.
Of course, if your sales guys said that, or your lawyers wrote it into the contract, probably someone should be fired for gross incompetence. It certainly shouldn’t be in the standard contract- opening yourself up to liability to millions of people would be insane. It might make it way into a custom contract, but unless your competitors are so dumb as to make the same promise, and hence force you to write a custom clause promising such a thing, then there is no good reason to promise such a thing. This is software, and backwards compatibility breaks, even at Microsoft. Lawyers and/or sales guys who make such promises are creating liability where there shouldn’t be any, and that is a cardinal sin. Microsoft may be many things, but they aren’t incompetent, particularly on the legal side. So- it isn’t impossible they could have created such liability for themselves (particularly in a deal with their biggest customers) but it is unlikely.
Outside of what Microsoft may have done to themselves with their contracts or actions, it is possible a court system could write such a term into a contract. This is basically how minimum warranties of product quality are created by governments- the government says ‘but of course you’re liable for X, regardless of what the contract says’, and then boom- you’re liable. But in the US the trend is to allow contracts to ‘opt out’ of such terms, and even where that is not the case, it seems unlikely (given the presumption that software is not compatible) that a court or a legislature would create such a huge responsibility- no matter how reasonable the idea might be, any court that tried would quickly have the entire software industry weighing in on the other side.
Finally, keep in mind that Microsoft has every incentive to fight this legally. If a customer of theirs goes to court to say ‘we are owed money because this product was not backwards compatible’, Microsoft would fight it utterly and completely tooth and nail- any court which read that term into a Microsoft contract would create huge liability for Microsoft for every succeeding product release they ever did. So the incentives cut strongly in favor of Microsoft fighting this tooth and nail (unless the liability comes from a custom-written contract which is so specific that it wouldn’t extend to other customers.)
Now, Microsoft certainly has a hard-earned reputation for backwards-compat, and they have every reason, from a marketing perspective, to fight to keep that reputation. But to answer your question, Mike, it seems possible but highly, highly unlikely that there is legal liability.
[Ed. later: see also my response to Mike in comments, on the question of whether or not this type of liability is something Mozilla should be worried about.]