Amazon Breaches Kindle User Contracts July 17, 2009
The Kindle User License Agreement clearly states:
Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device. . .
So Amazon is pretty clearly in breach of their contract to Kindle users who purchased the book, as Amazon did not allow them to keep a permanent copy of the book on their device. However, the License Agreement goes on to disclaim any liability for breach of the contract, and requires confidential arbitration to resolve any disputes you have with Amazon over the device.
Look for more on this over the weekend.