Cursor’s legal and data terms determine what a licensee may do with the output of the Service, which data Anysphere may use for training, and which contract applies. Three layers are involved. The online Terms of Service apply to individuals and teams that buy online. A Master Services Agreement, if one exists, replaces the online Terms for people using the Service through their employer.[1] Order Form pricing prevails over the Terms’ payment section.[1] The Acceptable Use Policy and Data Use page apply on top.[2][3]
Editions and grant
The Terms state that Anysphere is an applied research company working on automating coding. They grant a limited right to access and use the Service, subject to compliance, and reserve all rights not granted; there are no implied licences.[1] Users must be at least 18 or the age of majority and may not have been previously suspended or removed.[1] Anysphere is under no obligation to provide support, and any support offered is subject to published policies.[1]
Content, training and ownership
Inputs and the code or other outputs generated from them (Suggestions) together make up Content. Anysphere may use Content to provide the Service, comply with law, enforce its policies and keep the Service safe.[1] It states that it will not use Content to train, or allow third parties to train, AI models unless the user has explicitly agreed.[1] Users retain their rights in Inputs, and Anysphere assigns to them whatever rights it has in Suggestions. Suggestions may nevertheless be similar to those given to other customers, and no rights in other customers’ Suggestions are granted.[1] Users are responsible for evaluating Suggestions and bear the risk of relying on them.[1]
Anysphere may collect Usage Data (technical logs and learnings about use, excluding Content) for its business purposes and may disclose it to third parties only in aggregated or de-identified form.[1]
Restrictions
The Terms prohibit, among other things, reverse engineering the Service, creating derivative works, renting, leasing or selling it, using the Service or Suggestions to develop or train a model competitive with the Service, probing it, scraping it, and providing benchmark results of the Service to third parties unless all information needed to replicate the tests is included.[1] Users may not send data subject to specific legal protections, such as information regulated by HIPAA, the PCI Data Security Standard or the Gramm-Leach-Bliley Act.[1] The Acceptable Use Policy repeats the competing-model and resale prohibitions and adds distilling, circumventing rate limits, manipulating subscription, billing or usage-metering systems, and exploiting account provisioning, team management or user assignment workflows to avoid or reduce fees.[2] When a user selects a third-party model, that model provider’s acceptable use policy also applies.[2]
Beta Services are intended for evaluation and not for production use, are not fully supported, and may be withdrawn at any time with no liability.[1] If an auto-code-execution feature is enabled, the user assumes all risks of executing generated code without review.[1]
Privacy Mode, zero data retention and data flows
Privacy Mode can be enabled in settings or by a team or enterprise admin. It is available to anyone, including free and Pro users, and new team members inherit the team’s setting.[5] With it on, Customer Data is not used for training by Cursor, and Cursor states that it maintains zero data retention agreements with its providers so that they do not store or train on the data. Risk classifiers may still run, and data that trips an abuse detector may be stored for investigation.[3] With Privacy Mode off, Cursor may use and store codebase data, prompts, editor actions and code snippets to improve its AI features and train its models.[3] Privacy Mode is on by default for Enterprise teams.[4]
Three exceptions matter for compliance reviews. First, some models require data retention by the provider and fall outside Cursor’s zero data retention agreements; for Enterprise, Teams with Privacy Mode and individual users with Privacy Mode, an admin must approve such a model before use, and the approval applies to the whole team.[4] Second, zero data retention does not apply to requests made with a customer’s own API key.[6] Third, Cloud Agents are the only feature that requires Cursor to store code, as encrypted copies of repositories; they are optional.[4] Cursor also caches file contents temporarily, encrypted with client-generated keys, and states that cached contents are never permanently stored or used as training data when Privacy Mode is on.[3]
Encryption and data residency (Enterprise)
Enterprise customers can use Customer Managed Encryption Keys, enabled through sales, to encrypt data stored in Cursor’s infrastructure, including Cloud Agent data.[4] Data residency keeps inference, processing and storage for in-scope features in a selected region. At retrieval, US-only residency was available to Enterprise customers per team with an enrolment lead time of up to two weeks, EU and UK coverage was inference-only on request, and a 10% uplift applies to model pricing for eligible models.[4] Only listed model families run in region, and an ineligible model returns an error. Residency cannot be guaranteed for SSO, bring-your-own-key use, custom models behind a gateway, external MCP servers, Bugbot, shared links or Slack- and web-triggered Cloud Agents.[4]
Anysphere states that it holds AIUC-1, ISO/IEC 27001:2022 and ISO/IEC 42001:2023 certifications and a SOC 2 Type II attestation, commits to at least annual third-party penetration testing, and publishes subprocessors on its trust portal.[5] A data processing agreement covers sub-processors.[4] For managed devices, an allowed-team-ID policy can prevent sign-in to personal accounts, and an extension allowlist can restrict which extensions are installed.[7]
Termination, warranty, liability and dispute terms
Anysphere may modify, suspend or discontinue the Service without notice; if it terminates a subscription for a reason other than the user’s breach, it refunds the remaining fees pro rata.[1] It may suspend access for unpaid amounts and add collection fees.[1] The Service is provided as is. Aggregate liability to the user is capped at the greater of the amount paid in the prior six months or $100, claims must be filed within one year (federal) or two years (state), and the user indemnifies Anysphere for misuse and for claims that Inputs infringe third-party rights.[1] The laws of Texas govern, disputes go to the federal or state courts in Wichita County or Tarrant County, Texas, class and representative actions are barred, and a dispute notice and an informal resolution period of up to 45 days precede litigation.[1] Anysphere may change the Terms by posting them; continued use is acceptance.[1] The Pricing Policy has an equivalent change clause.[8]
Out of scope
This article does not reproduce the data processing agreement, which was not among the documents retrieved, or the commercial terms of an MSA, which are negotiated. It does not assess legal enforceability of any clause and does not cover the terms of third-party model providers or the Grok Bot supplement, which is discussed in the Cloud Agents article.