diff --git a/contracts/commitment_core/src/lib.rs b/contracts/commitment_core/src/lib.rs
index 0269de6..570351d 100644
--- a/contracts/commitment_core/src/lib.rs
+++ b/contracts/commitment_core/src/lib.rs
@@ -139,6 +139,11 @@ pub struct CommitmentCreatedEvent {
 /// - **Safe**: Low risk. Max loss ≤ 10%, Early exit penalty ≥ 15%. Target: Stable yield pools.
 /// - **Balanced**: Medium risk. Max loss ≤ 30%, Early exit penalty ≥ 10%. Target: Mixed yield/growth pools.
 /// - **Aggressive**: High risk. Max loss ≤ 100%, Early exit penalty ≥ 5%. Target: High-yield/volatile pools.
+///
+/// `grace_period_days` relaxes observational violation checks only:
+/// max-loss checks are ignored before `created_at + grace_period_days`, and
+/// duration checks use `expires_at + grace_period_days`. A zero grace period
+/// preserves the original strict max-loss and expiry behavior.
 pub struct CommitmentRules {
     pub duration_days: u32,
     pub max_loss_percent: u32,
@@ -220,6 +225,40 @@ fn transfer_assets(e: &Env, from: &Address, to: &Address, asset_address: &Addres
     token_client.transfer(from, to, &amount);
 }
 
+fn grace_seconds(e: &Env, grace_period_days: u32, context: &str) -> u64 {
+    TimeUtils::checked_days_to_seconds(grace_period_days)
+        .unwrap_or_else(|| fail(e, CommitmentError::ExpirationOverflow, context))
+}
+
+fn checked_grace_deadline(e: &Env, anchor: u64, grace_period_days: u32, context: &str) -> u64 {
+    let grace = grace_seconds(e, grace_period_days, context);
+    anchor
+        .checked_add(grace)
+        .unwrap_or_else(|| fail(e, CommitmentError::ExpirationOverflow, context))
+}
+
+fn within_loss_grace(e: &Env, commitment: &Commitment, current_time: u64) -> bool {
+    if commitment.rules.grace_period_days == 0 {
+        return false;
+    }
+
+    current_time < checked_grace_deadline(
+        e,
+        commitment.created_at,
+        commitment.rules.grace_period_days,
+        "chk",
+    )
+}
+
+fn duration_violation_deadline(e: &Env, commitment: &Commitment) -> u64 {
+    checked_grace_deadline(
+        e,
+        commitment.expires_at,
+        commitment.rules.grace_period_days,
+        "chk",
+    )
+}
+
 /// Helper function to call NFT contract mint function.
 fn call_nft_mint(
     e: &Env,
@@ -956,6 +995,12 @@ impl CommitmentCoreContract {
         e.storage().instance().set(&DataKey::TotalValueLocked, &updated_tvl);
     }
 
+    /// Return whether an active commitment currently violates loss or duration rules.
+    ///
+    /// The grace period suppresses temporary max-loss breaches during the initial
+    /// grace window and extends the duration violation deadline by the same number
+    /// of days. This is observational only; it emits a `Violated` event when a
+    /// violation is present but does not mutate commitment status.
     pub fn check_violations(e: Env, commitment_id: String) -> bool {
         let commitment = read_commitment(&e, &commitment_id)
             .unwrap_or_else(|| fail(&e, CommitmentError::CommitmentNotFound, "chk"));
@@ -963,14 +1008,16 @@ impl CommitmentCoreContract {
             return false;
         }
 
-        let current_time = e.ledger().timestamp();
+        let current_time = TimeUtils::now(&e);
         let loss_percent = if commitment.amount > 0 {
             SafeMath::loss_percent(commitment.amount, commitment.current_value)
         } else {
             0
         };
-        let violated = (loss_percent > commitment.rules.max_loss_percent as i128)
-            || (current_time >= commitment.expires_at);
+        let loss_violated = loss_percent > commitment.rules.max_loss_percent as i128
+            && !within_loss_grace(&e, &commitment, current_time);
+        let duration_violated = current_time >= duration_violation_deadline(&e, &commitment);
+        let violated = loss_violated || duration_violated;
 
         if violated {
             e.events().publish(
@@ -981,6 +1028,11 @@ impl CommitmentCoreContract {
         violated
     }
 
+    /// Return `(has_violations, loss_violated, duration_violated, loss_percent, time_remaining)`.
+    ///
+    /// Grace period semantics match `check_violations`: loss breaches are ignored
+    /// during the initial grace window, and duration uses `expires_at + grace`.
+    /// `time_remaining` counts down to the grace-adjusted duration deadline.
     pub fn get_violation_details(e: Env, commitment_id: String) -> (bool, bool, bool, i128, u64) {
         let commitment = read_commitment(&e, &commitment_id).unwrap_or_else(|| {
             fail(
@@ -990,16 +1042,18 @@ impl CommitmentCoreContract {
             )
         });
 
-        let now = e.ledger().timestamp();
+        let now = TimeUtils::now(&e);
         let loss_percent = if commitment.amount > 0 {
             SafeMath::loss_percent(commitment.amount, commitment.current_value)
         } else {
             0
         };
-        let loss_violated = loss_percent > commitment.rules.max_loss_percent as i128;
-        let duration_violated = now >= commitment.expires_at;
+        let loss_violated = loss_percent > commitment.rules.max_loss_percent as i128
+            && !within_loss_grace(&e, &commitment, now);
+        let duration_deadline = duration_violation_deadline(&e, &commitment);
+        let duration_violated = now >= duration_deadline;
         let has_violations = loss_violated || duration_violated;
-        let time_remaining = commitment.expires_at.saturating_sub(now);
+        let time_remaining = duration_deadline.saturating_sub(now);
 
         (
             has_violations,
diff --git a/contracts/commitment_core/src/tests.rs b/contracts/commitment_core/src/tests.rs
index 54e849b..e95396f 100644
--- a/contracts/commitment_core/src/tests.rs
+++ b/contracts/commitment_core/src/tests.rs
@@ -1329,6 +1329,81 @@ fn test_check_violations_loss_limit_exceeded() {
     assert!(has_violations, "Should have loss limit violation");
 }
 
+#[test]
+fn test_check_violations_loss_limit_relaxed_inside_grace_period() {
+    let e = Env::default();
+    let contract_id = e.register_contract(None, CommitmentCoreContract);
+    let owner = Address::generate(&e);
+    let commitment_id = "test_commitment_loss_grace";
+
+    let created_at = 1000u64;
+    let mut commitment = create_test_commitment(
+        &e,
+        commitment_id,
+        &owner,
+        1000,
+        800, // 20% loss - would exceed 10% outside grace
+        10,
+        30,
+        created_at,
+    );
+    commitment.rules.grace_period_days = 5;
+
+    store_commitment(&e, &contract_id, &commitment);
+
+    e.ledger().with_mut(|l| {
+        l.timestamp = created_at + 2 * 86400;
+    });
+
+    let has_violations = e.as_contract(&contract_id, || {
+        CommitmentCoreContract::check_violations(e.clone(), String::from_str(&e, commitment_id))
+    });
+    let (has_detail_violation, loss_violated, duration_violated, loss_percent, _time_remaining) = e
+        .as_contract(&contract_id, || {
+            CommitmentCoreContract::get_violation_details(
+                e.clone(),
+                String::from_str(&e, commitment_id),
+            )
+        });
+
+    assert!(
+        !has_violations,
+        "Grace period should suppress temporary loss breach"
+    );
+    assert!(
+        !has_detail_violation,
+        "Details should preserve grace semantics"
+    );
+    assert!(!loss_violated, "Loss should not violate inside grace");
+    assert!(!duration_violated, "Duration should not violate before expiry");
+    assert_eq!(loss_percent, 20, "Details still report observed loss percent");
+}
+
+#[test]
+fn test_check_violations_loss_limit_enforced_after_grace_period() {
+    let e = Env::default();
+    let contract_id = e.register_contract(None, CommitmentCoreContract);
+    let owner = Address::generate(&e);
+    let commitment_id = "test_commitment_loss_after_grace";
+
+    let created_at = 1000u64;
+    let mut commitment =
+        create_test_commitment(&e, commitment_id, &owner, 1000, 800, 10, 30, created_at);
+    commitment.rules.grace_period_days = 5;
+
+    store_commitment(&e, &contract_id, &commitment);
+
+    e.ledger().with_mut(|l| {
+        l.timestamp = created_at + 5 * 86400;
+    });
+
+    let has_violations = e.as_contract(&contract_id, || {
+        CommitmentCoreContract::check_violations(e.clone(), String::from_str(&e, commitment_id))
+    });
+
+    assert!(has_violations, "Grace ends at the exact grace deadline");
+}
+
 #[test]
 fn test_check_violations_duration_expired() {
     let e = Env::default();
@@ -1363,6 +1438,71 @@ fn test_check_violations_duration_expired() {
     assert!(has_violations, "Should have duration violation");
 }
 
+#[test]
+fn test_check_violations_duration_relaxed_until_expiry_grace_deadline() {
+    let e = Env::default();
+    let contract_id = e.register_contract(None, CommitmentCoreContract);
+    let owner = Address::generate(&e);
+    let commitment_id = "test_commitment_duration_grace";
+
+    let created_at = 1000u64;
+    let mut commitment =
+        create_test_commitment(&e, commitment_id, &owner, 1000, 980, 10, 30, created_at);
+    commitment.rules.grace_period_days = 3;
+
+    store_commitment(&e, &contract_id, &commitment);
+
+    e.ledger().with_mut(|l| {
+        l.timestamp = commitment.expires_at + 2 * 86400;
+    });
+
+    let (has_violations, loss_violated, duration_violated, _loss_percent, time_remaining) = e
+        .as_contract(&contract_id, || {
+            CommitmentCoreContract::get_violation_details(
+                e.clone(),
+                String::from_str(&e, commitment_id),
+            )
+        });
+
+    assert!(!has_violations, "Expiry grace should suppress duration violation");
+    assert!(!loss_violated, "Loss remains within bounds");
+    assert!(
+        !duration_violated,
+        "Duration should not violate before grace deadline"
+    );
+    assert_eq!(time_remaining, 86400, "One grace day should remain");
+
+    e.ledger().with_mut(|l| {
+        l.timestamp = commitment.expires_at + 3 * 86400;
+    });
+
+    let has_violations = e.as_contract(&contract_id, || {
+        CommitmentCoreContract::check_violations(e.clone(), String::from_str(&e, commitment_id))
+    });
+
+    assert!(has_violations, "Duration should violate at grace deadline");
+}
+
+#[test]
+#[should_panic(expected = "Duration would cause expiration timestamp overflow")]
+fn test_check_violations_grace_deadline_overflow_rejected() {
+    let e = Env::default();
+    let contract_id = e.register_contract(None, CommitmentCoreContract);
+    let owner = Address::generate(&e);
+    let commitment_id = "test_commitment_grace_overflow";
+
+    let mut commitment =
+        create_test_commitment(&e, commitment_id, &owner, 1000, 980, 10, 30, 1000);
+    commitment.rules.grace_period_days = 1;
+    commitment.expires_at = u64::MAX - 10;
+
+    store_commitment(&e, &contract_id, &commitment);
+
+    e.as_contract(&contract_id, || {
+        CommitmentCoreContract::check_violations(e.clone(), String::from_str(&e, commitment_id))
+    });
+}
+
 #[test]
 fn test_check_violations_both_violations() {
     let e = Env::default();
diff --git a/docs/commitment_core/SEMANTICS.md b/docs/commitment_core/SEMANTICS.md
index ce943dc..3b887d7 100644
--- a/docs/commitment_core/SEMANTICS.md
+++ b/docs/commitment_core/SEMANTICS.md
@@ -27,6 +27,16 @@ stateDiagram-v2
 
 `check_violations` is intentionally shown as a self-edge: it returns `true` and emits a `Violated` event when the active commitment currently violates max-loss or expiration rules, but it does not write a new status. The persistent `"violated"` transition is performed by `update_value` when the new value breaches `rules.max_loss_percent`.
 
+### Grace Period Semantics
+
+`CommitmentRules.grace_period_days` is enforced by observational violation checks without changing the stored commitment status:
+
+- Max-loss checks are relaxed during the initial grace window. A drawdown is not reported as a loss violation while `now < created_at + grace_period_days`.
+- Duration checks use the grace-adjusted deadline `expires_at + grace_period_days`. A commitment violates duration when `now >= expires_at + grace_period_days`.
+- A zero grace period preserves the original behavior: max-loss is checked immediately and duration violates at `expires_at`.
+- Grace deadline math uses `TimeUtils::checked_days_to_seconds` plus checked timestamp addition; overflow rejects the check instead of wrapping.
+- `get_violation_details` keeps the same tuple shape, but `loss_violated`, `duration_violated`, `has_violations`, and `time_remaining` all use the same grace-adjusted semantics as `check_violations`.
+
 ### Transition Table
 
 | Entrypoint | Status transition | Preconditions and guards | Errors on rejected path | State writes | Emitted event | Source |
@@ -34,7 +44,7 @@ stateDiagram-v2
 | `create_commitment` | `[new] -> "active"` | Reentrancy guard clear; contract not paused or in emergency; owner auth; non-zero owner; rate limit passes; positive amount; valid rules; expiration does not overflow; sufficient balance; NFT contract initialized; generated ID unused. | `ZeroAddress`, `InvalidAmount`, rule validation panics, `ExpirationOverflow`, `InsufficientBalance`, `NotInitialized`, `DuplicateCommitmentId`, `ArithmeticOverflow`. | Stores `Commitment.status = "active"`, owner index, total counter, TVL, all-ID index, the minted NFT token id, and collected fees only when `creation_fee > 0`. | Topic `Created`; payload includes amount, rules, NFT token id, and timestamp. The `CommitmentCreatedEvent` struct documents the same domain event shape. | [`lib.rs` lines 552-638](../../contracts/commitment_core/src/lib.rs#L552-L638) |
 | `update_value` | `"active" -> "active"` when loss stays within `max_loss_percent` | Caller is admin or authorized updater; rate limit passes; `new_value` is non-negative; commitment exists and is active. | `NotAuthorizedUpdater`, `CommitmentNotFound`, `NotActive`, `ArithmeticOverflow`. | Updates `current_value`; adjusts TVL by `new_value - old_value`; keeps status active. | Topic `ValUpd`; payload includes new value and timestamp. | [`lib.rs` lines 904-957](../../contracts/commitment_core/src/lib.rs#L904-L957) |
 | `update_value` | `"active" -> "violated"` when loss exceeds `max_loss_percent` | Same guards as the non-violating update path. The loss check is `SafeMath::loss_percent(amount, new_value) > rules.max_loss_percent`. | Same as the non-violating update path. | Updates `current_value`; stores `status = "violated"`; adjusts TVL by `new_value - old_value`. | Topic `Violated`; payload includes loss percent, max loss percent, and timestamp. | [`lib.rs` lines 920-957](../../contracts/commitment_core/src/lib.rs#L920-L957) |
-| `check_violations` | `"active" -> "active"` observation only | Commitment exists and is active. It checks max-loss and `current_time >= expires_at`. | `CommitmentNotFound`; non-active commitments return `false` without writing state. | No state writes. This entrypoint does not persist `"violated"`. | Topic `Violated` with `RuleViol` payload when the active commitment violates a rule. | [`lib.rs` lines 959-982](../../contracts/commitment_core/src/lib.rs#L959-L982) |
+| `check_violations` | `"active" -> "active"` observation only | Commitment exists and is active. It checks max-loss outside the initial grace window and duration at `expires_at + grace_period_days`. | `CommitmentNotFound`, `ExpirationOverflow`; non-active commitments return `false` without writing state. | No state writes. This entrypoint does not persist `"violated"`. | Topic `Violated` with `RuleViol` payload when the active commitment violates a rule. | [`lib.rs` lines 959-982](../../contracts/commitment_core/src/lib.rs#L959-L982) |
 | `settle` | `"active" -> "settled"` | Reentrancy guard clear; contract not paused; commitment exists; current time is at or after `expires_at`; commitment is active; NFT contract initialized. | `CommitmentNotFound`, `NotExpired`, `AlreadySettled`, `NotActive`, `NotInitialized`. | Stores `status = "settled"`; removes the owner index entry; decreases TVL by settlement amount; transfers assets; invokes `commitment_nft::settle`. | Topic `Settled`; payload includes settlement amount and timestamp. The `CommitmentSettledEvent` struct documents the same domain event shape. | [`lib.rs` lines 1032-1101](../../contracts/commitment_core/src/lib.rs#L1032-L1101) |
 | `early_exit` | `"active" -> "early_exit"` | Reentrancy guard clear; contract not paused; commitment exists; caller auth succeeds; caller is the commitment owner; commitment is active; NFT contract initialized. | `CommitmentNotFound`, `Unauthorized`, `NotActive`, `NotInitialized`. | Credits penalty to collected fees when positive; stores `status = "early_exit"` and `current_value = 0`; decreases TVL by the pre-penalty value; transfers the returned amount when positive; invokes `commitment_nft::mark_inactive`. | Topic `EarlyExt`; payload includes penalty, returned amount, and timestamp. | [`lib.rs` lines 1147-1224](../../contracts/commitment_core/src/lib.rs#L1147-L1224) |
 
@@ -60,6 +70,7 @@ The state machine has no entrypoint that returns `"violated"`, `"settled"`, or `
 | Non-violating value updates keep `"active"` and emit `ValUpd`. | [`test_update_value_no_violation`](../../contracts/commitment_core/src/tests.rs#L2915-L2947) |
 | Violating value updates persist `"violated"` and emit `Violated`. | [`test_update_value_triggers_violation`](../../contracts/commitment_core/src/tests.rs#L2949-L2982) |
 | `check_violations` reports a current rule violation without being the persistent transition path. | [`test_check_violations_after_update_value`](../../contracts/commitment_core/src/tests.rs#L2984-L3015) |
+| Grace periods suppress temporary max-loss and expiry violations until their checked deadlines. | `test_check_violations_loss_limit_relaxed_inside_grace_period`, `test_check_violations_loss_limit_enforced_after_grace_period`, `test_check_violations_duration_relaxed_until_expiry_grace_deadline`, `test_check_violations_grace_deadline_overflow_rejected` |
 | Early exit starts from `"active"` and is covered by the status/penalty test group. | [`test_early_exit_status_transition`](../../contracts/commitment_core/src/tests.rs#L2864-L2889) |
 | Early exit rejects settled, violated, and already exited commitments. | [`test_early_exit_already_settled`](../../contracts/commitment_core/src/tests.rs#L2512-L2543), [`test_early_exit_already_violated`](../../contracts/commitment_core/src/tests.rs#L2545-L2576), [`test_early_exit_already_exited`](../../contracts/commitment_core/src/tests.rs#L2578-L2609) |
 | Allocation rejects all terminal statuses even though it does not change lifecycle status. | [`test_allocate_when_settled_fails`](../../contracts/commitment_core/src/tests.rs#L2184-L2215), [`test_allocate_when_violated_fails`](../../contracts/commitment_core/src/tests.rs#L2217-L2248), [`test_allocate_when_early_exit_fails`](../../contracts/commitment_core/src/tests.rs#L2250-L2275) |