Customers may also choose to bring their claims in their local small claims court if they meet the normal jurisdictional requirements. For detailed information, please visit: http://www.xbox.com/en-US/Legal/LiveTOU.
So Microsoft has joined the ranks of Sony and other companies who are updating their TOS to include clauses which state you must agree to not sue them if they do anything that might be worthy of a lawsuit. You cannot opt out of this and obviously must agree to it in order to use your Xbox 360 and Xbox Live.
Purposefully putting up preemptive defenses knowing that your shoddy services might lead to a lawsuit isn’t necessary if you are simply providing the services and products that people expect, which Microsoft is not and has not been doing for a long time now. You may think, ‘this is none of my concern because I have no intention of suing Microsoft nor does the average gamer’ and you’re right, but consumer lawsuits are one of the few things that keep corporations from taking certain steps past the line of decency. It is a way for people to herd companies who are out of line and now Microsoft is one step closer to being set free of any limitations currently being placed upon them. With less limitations there is no one to say they should provide any quality service. There’s nobody to make them build the next Xbox out of quality parts that won’t break down on you after a year or even cause damage to your home.