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How does smoking disable a Laptop?

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Yes, this is one of the legal issues surrounding the legal viability of EULAs, TOS, and hidden rules that companies implement and then inform you of after the fact.

If there is nothing in the contract about cigarette smoke, you can try pressing the issue. But as general advice, it is best not to smoke around your electronics. The more modern the electronics, the more susceptible they are to failing due to pollutants in the air. And, yes, anyone selling you a service contract should make it entirely clear that such exposure will void a warranty. (Don't smoke around your computer, or keep it in a kitchen, etc.) General computer use tips should also include this fact, and it is likely included in the generic operating instructions at the start of some manuals, at least.