Terms of Service

Effective date: [EFFECTIVE DATE] · Version: 1.0-draft

These Terms of Service (the "Terms") are a binding agreement between the customer identified at signup ("Customer," "you") and Jake Bauman, a sole proprietor doing business as FrugalAI, with a principal place of business at [BUSINESS ADDRESS], California, USA ("FrugalAI," "we," "us"). By clicking to accept, creating an account, or using the Service, you agree to these Terms. If you accept on behalf of an organization, you represent that you have authority to bind it, and "Customer" means that organization.

The following documents are part of this agreement, in this order of precedence if they conflict: (1) a mutually signed Order Form or Enterprise agreement, if any; (2) the Data Processing Agreement ("DPA"); (3) these Terms; (4) the AI Terms Addendum, Acceptable Use Policy ("AUP"), Service Level Agreement ("SLA"), and Refund and Cancellation Policy. The Privacy Policy describes our data practices and is incorporated by reference as a notice.

1. Eligibility and business use

The Service is offered solely for business and professional use. You must be at least 18 years old. The Service is not offered to consumers acting for personal, family, or household purposes, and you represent you are not using it as one.

2. The Service

2.1 What FrugalAI is. FrugalAI is a control plane for AI model traffic: an OpenAI-compatible gateway that routes eligible requests among the model providers you configure, applies your routing and quality policies, caches approved repeat responses, meters estimated spend, enforces budgets you set, and records a request-level decision ledger ("Service"). FrugalAI is not a model provider and does not generate model outputs itself.

2.2 Your provider relationships. The Service operates on your own provider accounts and API keys ("BYOK Keys"). Your use of each model provider ("Provider") is governed solely by your agreement with that Provider. Provider fees are billed to you by Providers and are your responsibility. FrugalAI charges only the subscription fees in Section 6.

2.3 Free tier and beta features. Free plans and features identified as beta, preview, or early access are provided as-is, may be changed or discontinued with 30 days notice (or immediately where required for security or legal reasons), and are excluded from the SLA and from any warranty in Section 11.

2.4 Changes to the Service. We may improve or modify the Service. During a paid subscription term we will not materially degrade the core functionality described in Section 2.1.

3. Accounts and security

You are responsible for your account credentials, gateway virtual keys, and all activity under them, and for maintaining the confidentiality of BYOK Keys outside the Service. Notify us promptly at security@frugalai.io of any suspected compromise. You will keep account and billing contact information accurate.

4. Customer Content and data

4.1 Definitions. "Customer Content" means prompts, messages, tool definitions, files, and model responses transmitted through the Service for you, together with content derived from them (such as cached responses).

4.2 Ownership. As between the parties, you own Customer Content. We claim no rights in your prompts or outputs except the limited license below.

4.3 License to operate. You grant FrugalAI a limited, non-exclusive license to process Customer Content solely to provide, secure, and support the Service and as instructed in the DPA. We do not train machine-learning models on Customer Content and do not sell it.

4.4 Default data minimization. By default the gateway stores a cryptographic hash of each prompt rather than its content; prompt previews and cached prompt text are off by default and secret-redacted if you enable them. Details are in the Privacy Policy and AI Terms Addendum.

4.5 Usage data. We may collect and use telemetry about Service operation (such as token counts, latency, routing decisions, cache status, and cost metering) to operate and improve the Service, and may use aggregated or de-identified data that does not identify you or any person.

4.6 Data protection. The DPA applies whenever Customer Content includes personal data and is incorporated into these Terms.

5. AI-specific terms

The AI Terms Addendum is part of these Terms. In summary, and without limiting it: routing is heuristic and cost-optimizing and we do not guarantee any particular model selection, output quality, or savings amount; cached responses are reused only within your organization; if semantic caching or sampled quality evaluation is enabled, related content is sent to an embeddings/judge provider (currently OpenAI) regardless of the Provider serving the request; you are responsible for your use of model outputs, including human review where the stakes or the law require it.

6. Fees, billing, and taxes

6.1 Plans and fees. Current plans and pricing are listed at frugalai.io/pricing. Fees are billed in advance through Stripe on a monthly or annual cycle per your selection.

6.2 Automatic renewal. Paid subscriptions renew automatically at the end of each billing period at the then-current fee for your plan until you cancel. You may cancel at any time as described in Section 7, and cancellation takes effect at the end of the current period. At checkout we disclose the price, billing frequency, and renewal terms, and we capture your affirmative consent to them. For annual plans we send a renewal reminder before each renewal.

6.3 Price changes. We may change fees with at least 30 days prior notice by email; changes take effect at your next renewal. For any fee increase to an active auto-renewing subscription we will give notice of the change and how to cancel no less than 7 and no more than 30 days before it takes effect. If you do not agree, cancel before the change applies.

6.4 Taxes. Fees exclude taxes. We collect sales tax, VAT, or similar amounts where legally required, based on the billing information you provide. You are responsible for any taxes on your Provider usage.

6.5 Nonpayment. If a payment fails we will notify you and retry. We may downgrade or suspend paid features if fees remain unpaid 10 days after notice.

7. Cancellation and refunds

You can cancel online at any time from the dashboard billing page (via the Stripe customer portal), in the same medium you used to subscribe, without contacting support. The Refund and Cancellation Policy governs refunds and is incorporated into these Terms.

8. Acceptable use and suspension

8.1 The AUP is part of these Terms.

8.2 We may suspend the Service (in whole or for affected workloads) immediately and without prior notice if reasonably necessary to address a security risk, unlawful use, harm to the Service or others, a Provider's binding demand, or suspected AUP violation; otherwise we will give notice and a reasonable chance to cure before suspending. We will limit suspensions in scope and duration to what is reasonably necessary and restore Service promptly once the cause is resolved.

9. Intellectual property; feedback; publicity

The Service, including software, interfaces, documentation, and the decision-ledger schema, is owned by FrugalAI and its licensors; no rights are granted except as stated. If you give us feedback, you grant us a perpetual, irrevocable, royalty-free license to use it without restriction or attribution. Neither party will use the other's name or logo publicly without prior written consent.

10. Confidentiality

Each party will protect the other's non-public information disclosed under this agreement with reasonable care, use it only to perform under these Terms, and not disclose it except to personnel and contractors under confidentiality duties, or as required by law with prompt notice where lawful. Confidentiality obligations survive for 3 years after termination; trade secrets remain protected as long as they are trade secrets.

11. Warranties and disclaimers

11.1 Mutual. Each party warrants it has the authority to enter into these Terms.

11.2 Limited warranty (paid plans). We warrant that the paid Service will perform materially as described in Section 2.1 and our published documentation under normal use. Your exclusive remedy for breach is that we will use reasonable efforts to correct the nonconformity; if we cannot within 30 days, you may terminate the affected subscription and receive a pro-rata refund of prepaid, unused fees.

11.3 Disclaimers. EXCEPT AS STATED IN SECTION 11.2, THE SERVICE IS PROVIDED "AS IS" AND "AS AVAILABLE." WE DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, WE DO NOT WARRANT THAT THE SERVICE WILL BE UNINTERRUPTED OR ERROR-FREE; WE MAKE NO WARRANTY REGARDING ANY PROVIDER, MODEL, OR MODEL OUTPUT, INCLUDING ITS ACCURACY, LEGALITY, OR FITNESS; AND ANY COST-SAVINGS FIGURES ARE ESTIMATES, NOT GUARANTEES. SLA CREDITS ARE YOUR SOLE REMEDY FOR AVAILABILITY FAILURES ON SLA-ELIGIBLE PLANS.

12. Indemnification

12.1 By Customer. You will defend and indemnify FrugalAI against third-party claims arising from: (a) Customer Content; (b) your products, services, or end users; (c) your breach of the AUP or of your Provider agreements; or (d) your violation of law.

12.2 By FrugalAI (paid plans). We will defend and indemnify you against third-party claims that the Service, as provided by us and used as permitted, directly infringes a U.S. patent, copyright, or trademark, or misappropriates a trade secret. This does not apply to claims arising from Customer Content, Providers or model outputs, combinations with items not provided by us, or use after we notify you to stop. If the Service is enjoined we may modify it, replace it, or terminate the affected subscription with a pro-rata refund. This section states our entire liability for infringement.

12.3 Process. The indemnified party must give prompt notice, sole control of defense and settlement to the indemnifying party (no settlement admitting fault or imposing obligations on the indemnified party without its consent), and reasonable cooperation.

13. Limitation of liability

13.1 NEITHER PARTY IS LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR FOR LOST PROFITS, REVENUE, DATA, OR GOODWILL, EVEN IF ADVISED OF THE POSSIBILITY.

13.2 EACH PARTY'S TOTAL AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THESE TERMS IS CAPPED AT THE GREATER OF (A) THE FEES PAID OR PAYABLE BY CUSTOMER TO FRUGALAI IN THE 12 MONTHS BEFORE THE FIRST EVENT GIVING RISE TO LIABILITY, OR (B) US $100.

13.3 The exclusions and cap do not apply to: Customer's payment obligations; a party's indemnification obligations under Section 12; or a party's fraud or willful misconduct. Nothing in these Terms limits liability that cannot be limited under applicable law.

13.4 Provider charges. For clarity, and because Providers bill you directly on your own accounts: FrugalAI is not liable for Provider fees you incur, including fees resulting from routing decisions, cache misses, retries, or misconfiguration, except to the extent caused by our willful misconduct. Budget controls are aids, not guarantees of spend outcomes.

14. Term and termination

14.1 These Terms apply from acceptance until all subscriptions end and accounts are closed.

14.2 Either party may terminate for material breach not cured within 30 days of notice (10 days for nonpayment). You may stop renewal at any time per Section 7. We may terminate free accounts with 30 days notice.

14.3 On termination: access ends; you have 30 days to request export of available account data as described in the DPA and Privacy Policy; thereafter we delete Customer Content per the DPA. Sections that by nature survive (including 4.5, 9, 10, 11.3, 12, 13, 15, 16) survive.

15. Governing law and disputes

These Terms are governed by California law, excluding conflict-of-laws rules. The exclusive venue for disputes is the state or federal courts located in [COUNTY], California, and each party consents to personal jurisdiction there. EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL. Either party may seek injunctive relief in any competent court and may bring qualifying claims in small claims court. [COUNSEL DECISION: replace this section with binding individual arbitration if preferred.]

16. Compliance; export; government use

You will comply with applicable export control and sanctions laws, including U.S. OFAC regulations; you represent you are not located in an embargoed jurisdiction and are not on any restricted-party list, and will not permit access from or for such persons. The Service is commercial computer software; government users receive only the rights in these Terms.

17. Changes to these Terms

We may update these Terms. For material changes we will give at least 30 days notice by email and dashboard notice, with the new version and effective date posted with a version history. Continued use after the effective date is acceptance; if you object, cancel before it takes effect and Section 7 applies. The version you accepted, and when, is recorded in our acceptance log.

18. General

Notices to FrugalAI go to legal@frugalai.io; notices to you go to your account or billing email and are deemed given when sent. You may not assign these Terms without our consent, except to a successor in a merger, acquisition, or sale of substantially all assets, with notice. We may assign these Terms to a successor entity of the FrugalAI business (including an entity formed by the founder), effective on notice, provided the successor assumes them. Neither party is liable for delay or failure caused by events beyond its reasonable control, including Provider or infrastructure outages, provided the affected party works to resume promptly (this does not excuse payment obligations). The parties are independent contractors. There are no third-party beneficiaries. If a provision is unenforceable it will be modified to the minimum extent necessary and the rest remains in effect. No waiver is implied from any failure to enforce. These Terms, with the documents in the preamble, are the entire agreement and supersede the prior "FrugalAI pilot terms."

Contracting party and contact: Jake Bauman d/b/a FrugalAI, [BUSINESS ADDRESS], California, USA · legal@frugalai.io · Fictitious Business Name statement [FBN NUMBER, COUNTY] on file.