Terms of Service

PLEASE READ THESE TERMS OF SERVICE CAREFULLY BEFORE CREATING AN ACCOUNT OR USING THE GRADY PLATFORM. BY CLICKING “I AGREE,” CREATING AN ACCOUNT, OR OTHERWISE ACCESSING OR USING THE SERVICE, YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTOOD, AND AGREE TO BE LEGALLY BOUND BY THESE TERMS. IF YOU DO NOT AGREE, YOU MAY NOT USE THE SERVICE.

These Terms of Service (“Terms”) are a legally binding agreement between you (“Instructor,” “you,” or “your”) and Grady Labs Inc. (“Grady,” “Company,” “we,” “us,” or “our”), operator of the Grady automated grading and feedback platform available through gradyai.com, app.gradyai.com, and related services (collectively, the “Service” or “Platform”). These Terms govern individual, standalone instructor access to the Platform. Institutional, enterprise, LMS, or LTI access provided under an agreement with an educational institution is governed by that separate agreement and not by these Terms.

1. Description of the Service

Grady is an AI-powered grading and feedback platform for university and college instructors and teaching professionals. Standalone accounts are intended for individual instructor use. The Platform may include:

• AI-generated, rubric-aligned grading and individualized written feedback on student assignment submissions.
• Tools to create, configure, and manage assignments, rubrics, grading criteria, answer keys, and point weighting.
• A credit-based processing model that controls the amount of grading and feedback activity available to an account.
• Tools that allow instructors to review, edit, accept, reject, or override AI-generated grades and feedback before final use.
• Analytics and reporting related to assignment performance, grade distributions, common errors, and instructor review activity.
• LMS integration features where enabled under an applicable institutional arrangement.

Grady may add, modify, suspend, or discontinue Platform features. Material changes affecting paid standalone use will be handled in accordance with these Terms and applicable law.

2. Eligibility

To create a standalone account and use the Service, you must:

• Be at least eighteen (18) years old.
• Be a current instructor, professor, teaching assistant, lecturer, or other academic professional employed by or affiliated with an educational institution.
• Have legal capacity to enter into a binding contract in your jurisdiction.
• Not be prohibited by applicable law from receiving services originating from the United States.
• Not be located in a jurisdiction subject to a U.S. Government embargo and not be listed on a U.S. Government denied-parties list.

Grady may verify eligibility and may refuse or terminate access if these requirements are not satisfied. If you are accessing Grady under an institutional agreement, contact partnerships@gradyai.com; those institutional services are governed by the applicable institutional agreement.

3. Account Registration and Security

To use the standalone Platform, you must create an account and provide accurate, current, and complete registration information. You must update account information when it changes and may not create an account using information you are not authorized to provide.

3.1 Account Security

You are responsible for maintaining the confidentiality and security of your account credentials and for activity conducted through your account. You agree to use a strong, unique password, protect your credentials from unauthorized access, and notify Grady promptly at security@gradyai.com if you suspect unauthorized account use. You should sign out when using shared or public devices.

3.2 One Account Per Instructor

Each instructor may maintain one active standalone account unless Grady expressly permits otherwise. Creating duplicate accounts to avoid restrictions, suspensions, or credit limits may result in suspension or termination.

4. Credits and Payment

4.1 Credit-Based Model

Access to AI-powered grading and feedback functions is governed by a prepaid credit system (“Credits”). Credits are made available in advance and are consumed when the Platform processes eligible grading, feedback, or other AI-powered operations, as described in the account interface. Grady may make promotional or free Credits available at its discretion. Questions about Credits may be directed to support@gradyai.com.

4.2 Purchases, Pricing, and Taxes

Where paid Credits are offered, prices and applicable purchase terms will be displayed before purchase. You are responsible for applicable taxes except taxes imposed on Grady's income. Grady may change pricing prospectively. Changes do not alter Credits already purchased except where required by law.

4.3 Refunds and Expiration

Consumed Credits are non-refundable. Unused Credits are subject to the terms displayed at purchase and any applicable law. Promotional Credits may be subject to separate expiration or use conditions disclosed when issued.

5. Student Data, Standalone Use, and Institutional Use

5.1 Standalone Instructor Responsibility

A standalone account is an individual instructor account and is not, by itself, an institutional data-processing arrangement. You are responsible for determining whether your use of the standalone Platform complies with FERPA, your institution's policies, and other applicable privacy or education-record requirements. Unless your institution has approved another arrangement, you should remove or de-identify student personally identifiable information before uploading student work to the standalone Platform.

5.2 Grady Commitments for Student-Related Content

• Grady will not sell, rent, or trade student submission content for commercial purposes.
• Grady will not use student submission content for advertising or targeted advertising.
• Grady will treat User Content as confidential and will access it only as needed to provide, secure, support, or improve the Service for the user, or as required by law.
• Grady will not use student submission content to train or fine-tune Grady AI models.
• If a system error interrupts processing, Grady may reprocess the affected task as necessary to complete the requested service.

5.3 Standalone Retention Is Different From LMS/LTI Retention

The zero-retention or rapid-purge process described for Grady's institutional LMS/LTI grading workflow does not apply to content uploaded through a standalone account. Standalone User Content may remain associated with the account while the account is active and is handled under the retention and termination provisions in Section 15 and the Privacy Policy.

5.4 Institutional Accounts

Institutional, enterprise, LMS, or LTI use that requires a Data Processing Agreement, FERPA School Official designation, or other institutional terms must be governed by a separate written agreement with Grady. Contact partnerships@gradyai.com. These Terms do not create a FERPA School Official relationship between Grady and your institution.

6. User Content

6.1 Ownership

“User Content” means content you submit, upload, post, or transmit through the Platform, including assignment prompts, rubrics, grading criteria, answer keys, student submissions, and related materials. You retain your ownership rights in your User Content.

6.2 License to Grady

By submitting User Content, you grant Grady a limited, non-exclusive, royalty-free license to access, store, process, reproduce, transmit, and use the User Content only as needed to provide, operate, secure, support, and improve the Service for you; generate grading and feedback in response to your instructions; and comply with applicable law or valid legal process. This license does not authorize Grady to sell your User Content or publicly disclose it except as permitted by these Terms or required by law.

6.3 Your Responsibilities for User Content

You represent and warrant that you have the rights, permissions, and authority needed to submit User Content; that your User Content does not unlawfully infringe third-party rights; that you have complied with applicable law, including FERPA where relevant; and that the content does not contain malicious code intended to damage or compromise the Platform.

6.4 AI-Generated Outputs

Grades, feedback, summaries, or other content generated by the Platform (“AI Outputs”) are provided for professional review. You are responsible for reviewing and approving AI Outputs before communicating them to students or treating them as official academic decisions. Final grading decisions remain the responsibility of the instructor or institution.

7. Intellectual Property

7.1 Grady Intellectual Property

The Platform and its software, AI models, algorithms, source code, interfaces, trademarks, logos, documentation, and other proprietary technology (“Grady IP”) are owned by Grady Labs Inc. or its licensors. Except for the limited right to use the Service under these Terms, no ownership interest in Grady IP is transferred to you.

You may not copy, reproduce, distribute, create derivative works from, reverse engineer, decompile, disassemble, or attempt to extract source code from Grady IP except to the extent a restriction is prohibited by law. You may not remove proprietary notices or use Platform outputs or behavioral information to build, train, benchmark, or improve a competing automated grading or feedback system without Grady's written permission.

7.2 Feedback

If you provide suggestions, ideas, or product feedback to Grady, you grant Grady a perpetual, worldwide, royalty-free right to use that feedback without an obligation to compensate or attribute you.

7.3 Sample Materials

Example assignments, synthetic submissions, rubrics, answer keys, grades, feedback, analytics, or other sample content made available by Grady (“Sample Materials”) are provided only to evaluate the Platform. Unless Grady gives written permission, you may not republish, distribute, commercially exploit, use in live instruction or assessment, input into another AI service, or use Sample Materials to train or benchmark another grading or AI system.

8. Prohibited Activities

You may not use the Service to:

• Violate applicable law or regulation.
• Upload unlawful, defamatory, harassing, infringing, or unauthorized content.
• Introduce malware or code intended to disrupt, damage, or obtain unauthorized access to systems.
• Use bots, scripts, scraping tools, or other automated methods in a manner that exceeds normal authorized instructional use.
• Harvest Platform data or AI Outputs to create or improve a competing product or service.
• Impersonate another person or misrepresent your affiliation with an institution.
• Circumvent or interfere with security features, access controls, authentication, rate limits, or credit controls.
• Share account credentials or allow another person to use your standalone account.
• Exploit errors in pricing, Credits, or Platform processing.
• Use the Platform in a manner that materially harms Grady, other users, or Grady's business relationships.

9. Privacy

Grady's collection, use, disclosure, and retention of personal information is described in the Grady Privacy Policy at https://gradyai.com/privacy-policy. The Privacy Policy is incorporated into these Terms by reference.

Acceptance of these Terms does not constitute consent to optional analytics or session replay. Where Grady offers consent-based PostHog product analytics or session replay in the standalone application, that choice is presented separately from acceptance of these Terms and is not required to use the Service.

• Grady does not sell personal information or User Content.
• Grady does not permit third-party advertising based on standalone Platform activity.
• Grady uses security measures designed to protect account information and User Content.
• Account deletion and retention are handled as described in the Privacy Policy and Section 15.

10. Confidentiality

Non-public aspects of the Platform, including proprietary model behavior, scoring logic, system design, and non-public documentation, may constitute Grady confidential information. You may use such information only for authorized use of the Service and may not disclose it to competitors or other unauthorized parties. This restriction does not apply to information that becomes public through no fault of yours, was lawfully known to you without restriction, or is lawfully received from a third party without a confidentiality obligation.

11. Third-Party Services and Links

The Platform may use or integrate with third-party services, including cloud infrastructure, AI service providers, Learning Management Systems, and analytics providers. Your use of a third-party service may also be subject to that provider's terms and privacy practices.

For the standalone application, Grady uses PostHog for product analytics and session replay only when the user has separately consented to that optional processing. PostHog receives product-usage events and technical browser or device information described in the Privacy Policy. Grady configures this analytics process so that student submissions, grades, and feedback content are not sent to PostHog.

If you enable LMS integration features through standalone access, you remain responsible for ensuring that your use is authorized by your institution. Institutional LMS/LTI deployments may be subject to separate written agreements with Grady.

12. Disclaimer of Warranties

THE SERVICE, AI OUTPUTS, SAMPLE MATERIALS, AND PLATFORM FEATURES ARE PROVIDED “AS IS” AND “AS AVAILABLE” TO THE MAXIMUM EXTENT PERMITTED BY LAW. GRADY DISCLAIMS EXPRESS AND IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.

GRADY DOES NOT WARRANT THAT THE SERVICE WILL MEET EVERY REQUIREMENT; THAT AI-GENERATED GRADES OR FEEDBACK WILL BE ACCURATE, COMPLETE, OR APPROPRIATE FOR EVERY STUDENT OR ASSIGNMENT; THAT THE SERVICE WILL BE UNINTERRUPTED, SECURE, OR ERROR-FREE; OR THAT EVERY ERROR WILL BE CORRECTED. YOU ARE RESPONSIBLE FOR PROFESSIONAL REVIEW OF GRADING DECISIONS AND AI OUTPUTS.

13. Limitation of Liability

TO THE MAXIMUM EXTENT PERMITTED BY LAW, GRADY, ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS, AND LICENSORS WILL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, INCLUDING LOSS OF PROFITS, REVENUE, DATA, GOODWILL, OR OTHER INTANGIBLE LOSSES, ARISING OUT OF OR RELATED TO THE SERVICE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, GRADY'S TOTAL CUMULATIVE LIABILITY FOR CLAIMS ARISING OUT OF OR RELATED TO THESE TERMS OR THE SERVICE WILL NOT EXCEED THE GREATER OF (A) THE AMOUNT YOU PAID TO GRADY DURING THE TWELVE (12) MONTHS BEFORE THE EVENT GIVING RISE TO THE CLAIM OR (B) ONE HUNDRED U.S. DOLLARS ($100). If applicable law does not permit a stated exclusion or limitation, liability will be limited to the greatest extent permitted by law.

14. Indemnification

To the extent permitted by law, you agree to defend, indemnify, and hold harmless Grady Labs Inc., its affiliates, officers, directors, employees, and agents from claims, damages, losses, liabilities, costs, and expenses arising from your violation of these Terms; your User Content; your violation of law or third-party rights, including FERPA obligations applicable to you; unauthorized use of your account caused by your acts or omissions; or your willful misconduct or negligence.

15. Term and Termination

15.1 Term

These Terms begin when you create or first use a standalone account and continue until the account is terminated.

15.2 Termination by You

You may terminate your account through available account settings or by contacting support@gradyai.com. Termination does not automatically entitle you to a refund of unused Credits unless required by law or separately approved by Grady.

15.3 Suspension or Termination by Grady

Grady may suspend or terminate access for material breach of these Terms, nonpayment, conduct that creates legal or security risk, a valid request from a law-enforcement or regulatory authority, or extended inactivity. Where practical and legally permitted, Grady will provide notice appropriate to the circumstances.

15.4 Effect of Termination and Retention

When the account terminates, your right to use the standalone Service ends. Grady retains standalone account data for sixty (60) days after termination to allow export of content, after which the account data may be permanently deleted. Grady may retain aggregated or de-identified information that cannot reasonably be linked to an identifiable user, subject to applicable law. The institutional LMS/LTI purge process described in the Privacy Policy is separate from this standalone account-retention rule.

15.5 Survival

Provisions that by their nature should survive termination remain in effect, including provisions concerning User Content representations, intellectual property, confidentiality, disclaimers, limitations of liability, indemnification, dispute resolution, and accrued payment obligations.

16. Digital Millennium Copyright Act (DMCA)

If you believe content available through the Platform infringes a copyright you own or are authorized to enforce, send a written notice containing the information required by 17 U.S.C. § 512(c)(3), including identification of the copyrighted work, identification and location of the allegedly infringing material, your contact information, the required good-faith and accuracy statements, and an electronic or physical signature.

DMCA notices should be sent to: Copyright Agent, Grady Labs Inc.; Email: corporate@gradyai.com.

Grady may terminate accounts of repeat infringers where appropriate. Knowingly making a material misrepresentation in a copyright notice may result in liability under applicable law.

17. Governing Law and Dispute Resolution

17.1 Governing Law

These Terms are governed by the laws of the State of California, without regard to conflict-of-laws principles.

17.2 Informal Resolution

Before initiating a formal dispute, you agree to send written notice to corporate@gradyai.com and allow at least thirty (30) days for the parties to attempt to resolve the dispute in good faith.

17.3 Binding Arbitration

Except for matters described in Section 17.5, unresolved disputes will be resolved by binding arbitration administered by the American Arbitration Association under applicable AAA consumer arbitration rules. Unless the parties agree otherwise, arbitration will occur in San Francisco County, California, and the arbitrator will apply California law. The arbitrator's award may be entered in a court of competent jurisdiction.

17.4 Class Action Waiver

TO THE EXTENT PERMITTED BY LAW, CLAIMS MUST BE BROUGHT ON AN INDIVIDUAL BASIS AND NOT AS A PLAINTIFF OR CLASS MEMBER IN A CLASS, COLLECTIVE, OR REPRESENTATIVE ACTION. THE ARBITRATOR MAY NOT CONSOLIDATE CLAIMS OF MULTIPLE PERSONS WITHOUT THE WRITTEN CONSENT OF THE PARTIES. BY ACCEPTING THESE TERMS, YOU AND GRADY WAIVE THE RIGHT TO A JURY TRIAL FOR CLAIMS SUBJECT TO ARBITRATION.

17.5 Exceptions

Either party may seek temporary or emergency equitable relief from a court with jurisdiction to protect intellectual property or confidential information. Eligible small-claims matters may be brought in small claims court.

18. Modifications to These Terms

Grady may update these Terms. If a change is material, Grady will provide notice through the email address associated with the account, an in-product notice, or another reasonable method before the change takes effect. Non-material corrections or clarifications may take effect when posted. Continued use after the effective date of revised Terms constitutes acceptance of the revised Terms. If you do not agree, you must stop using the Service and may terminate the account.

19. General Provisions

19.1 Entire Agreement

These Terms, the Privacy Policy, and any supplemental agreement applicable to your use constitute the agreement between you and Grady concerning the standalone Service and supersede prior understandings concerning that subject.

19.2 Severability

If a provision is found invalid or unenforceable, it will be modified or limited to the minimum extent necessary, and the remaining provisions will remain in effect.

19.3 Waiver

A failure to enforce a provision does not waive the right to enforce that provision later.

19.4 Assignment

You may not assign these Terms without Grady's prior written consent. Grady may assign these Terms in connection with a merger, acquisition, corporate reorganization, financing, or sale of all or substantially all relevant assets, or as otherwise permitted by law.

19.5 No Agency

These Terms do not create a partnership, joint venture, employment, fiduciary, or agency relationship between you and Grady.

19.6 Electronic Communications

You agree that Grady may provide account, service, and legal communications electronically, including by email or in-product notice, where permitted by law.

19.7 Force Majeure

Grady is not responsible for delay or failure caused by events beyond its reasonable control, including natural disasters, government actions, internet or infrastructure failures, pandemics, labor disputes, or failures of third-party service providers.

20. Contact Information

Grady Labs Inc. d/b/a Grady
Terms, legal notices, disputes, and DMCA notices: corporate@gradyai.com
Standalone account support: support@gradyai.com
Security concerns: security@gradyai.com
Institutional agreements: partnerships@gradyai.com
Website: https://gradyai.com

BY CREATING AN ACCOUNT, YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTOOD, AND AGREE TO THESE TERMS OF SERVICE.