Amazon’s recent failure in its web hosting system highlights risks for institutions to consider when using computer services based in the cloud. Several client websites were unavailable while Amazon diagnosed and fixed the problem. Amazon is considered a reliable cloud service provider, but this failure (due to human error) shows the necessity of using a provider with resource to ensure issues are dealt with promptly and that contract conditions include where appropriate, provisions for handling resulting claims due to loss of service provision.
More information and link to the technical explanation for the failure is available at - http://www.bbc.co.uk/news/business-13242782.
Queen Mary, University of London, has a series of research papers on cloud computing including a relevant Terms of Service Analysis for Cloud Providers available from http://www.cloudlegal.ccls.qmul.ac.uk/Research/index.html.