According to Eben, the Institutes of Justinian is a key to his 
"license-not-a-contract" sorta legal concept (don't confuse it with 
"license" as in state permits, because the context is intellectual 
property here). I've downloaded the damn thing... and solved the 
puzzle! The operative part in Moglen's "license-not-a-contract"
concept is this:

   "A lunatic cannot enter into any contract at all, because he 
    does not understand what he is doing."

                                      -- Institutes of Justinian

regards,
alexander.
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