When I attempted to install Windows 10 into a virtual machine to upgrade that virtual machine to Windows 11, I was met with the useless error message “Windows cannot find the Microsoft Software License Terms.” Check the installation sources and restart the installation.” After some tinkering, I was able to come up with a workable solution.

This error message, it turns out, means something completely different than what it says: there is something wrong with this computer.

This message is typically displayed when installing into a virtual machine and something is configured unusually for a Windows 10 or 11 computer. For example, here are some of the possible causes of your problem:

Dynamic memory is enabled in Hyper-V.

This was the issue I was having, and turning off dynamic memory solved it immediately. See the instructions below for how to do so.

The virtual machine does not have enough memory.

If you try to install Windows into a virtual machine that doesn’t have a lot of RAM, it may fail.

There is a floppy drive in your VMware virtual machine.

Yes, Windows 10 dislikes floppy drives and may fail to install in a virtual machine if you have one.

Secure Boot Isn’t Enabled

You’ll want the secure boot to be enabled. For more information, please see the section below.

Create a Blank Virtual Machine and Try Again

Sometimes the default settings in the virtual machine software are incorrect, so you can manually create a virtual machine template with the correct settings, mount the ISO, and install it.

Something is wrong with your installation media

Attempt to download the ISO image again or use a different flash drive.

It’s possible that something else is causing this error, but these are the solutions we discovered while researching.

How to Disable Dynamic Memory in Hyper-V

• Open the Hyper-V Manager, locate your virtual machine in the list, and access the settings by right-clicking or using the Actions pane on the right. Go down to Memory and uncheck the “Enable Dynamic Memory” option.

• You’ll want to make sure you’ve given the VM enough RAM for Windows to function properly.
• Close the dialog, restart your virtual machine, and it should begin working immediately.

How to Enable Hyper-V Secure Boot

• Open the Hyper-V Manager and navigate to your virtual machine’s settings. Locate Security in the left-hand pane, and then check the box next to “Enable Secure Boot.”
• This option should be checked by default, but manually creating a virtual machine template may result in it being unchecked.
• At this point, you should be able to attach the ISO and complete the installation.

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