The "Free Grace" error, as Wayne Grudem (2016) explains it, is the interpretation about the interplay between grace and faith which asserts "...that faith occurs by itself when a person is justified, in the sense that no other human actions necessarily accompany faith (such as repentance from sin or doing good works after we are justified)." (p. 19)
As you may be able to tell, there are those folks out there who define 'Grace' in such a way that it then also colors how they interpret and define what faith is and does, among other concepts. The result being that they then have a truncated notion of both grace and faith. And this is one reason why I say it's not enough to simply read the biblical texts and assume we can take it for granted that a biblical word like "grace" can immediately, and with absolute clarity, be understood the way the original New Testament writers intended for it to be understood.
Another reason is given by D.A. Carson (1996) in that, hermeneutically, it's not enough to rely upon mere word studies alone when trying to understand concepts like 'grace' in the Bible since word studies alone can result in the committing of various interpretive fallacies, like those Carson cites in the following list (pp. 27-64):
1) root fallacy
2) semantic anachronism
3) semantic obsolescence
4) appeal to unknown or unlikely meanings
5) careless appeal to background information
6) verbal parallelomania
7) [false] linkage between language and mentality
8) false assumptions about technical meaning
9) problems surrounding synonyms and componential analysis
10) selective and prejudicial use of evidence
11) unwarranted semantic disjunctions and restrictions
12) unwarranted restriction of the semantic field
13) problems relating to the Semitic background of the Greek New Testament
14) unwarranted neglect of distinguishing particularities of a corpus
15) unwarranted linking of sense and reference
All of these fallacies could, possibly, even be committed by someone who thinks they're reading the word "grace" in the New Testament and who them assumes, all too easily, that they understand the full semantic context and conceptual linkages of that term with everything else he or she reads, all the while being in error.
So, we ALL have to be careful and not just assume that singular words in the Bible, like 'grace,' are easily understood in every case in which we encounter them.
Of course, none of us earns God's grace; if we did, it wouldn't be grace, it'd instead be merited favor.
REFERENCE
Carson, D.A. (1996).
Exegetical Fallacies.
Grudem, Wayne. (2016).
"Free Grace" Theology: 5 Ways It Diminishes the Gospel.