Just as in ordinary linear algebra we can form an algebra from any graded module. Furthermore we will see that a differential induces a derivation.
\begin{definition}
The \emph{tensor algebra} of a graded module $M$ is defined as
$$ T(M)=\bigoplus_{n\in\N} M^{\tensor n}, $$
where $M^{\tensor0}=\k$. An element $m = m_1\tensor\ldots\tensor m_n$ has a \emph{word length} of $n$ and its degree is $\deg{m}=\sum_{i=i}^n \deg{m_i}$. The multiplication is given by the tensor product (note that the bilinearity follows immediately).
\end{definition}
Note that this construction is functorial and it is free in the following sense.
\begin{lemma}
Let $M$ be a graded module and $A$ a graded algebra.
\begin{itemize}
\item A graded map $f: M \to A$ of degree $0$ extends uniquely to an algebra map $\overline{f} : TM \to A$.
\item A differential $d: M \to M$ extends uniquely to a derivation $d: TM \to TM$.
\end{itemize}
\end{lemma}
\begin{corollary}
Let $U$ be the forgetful functor from graded algebras to graded modules, then $T$ and $U$ form an adjoint pair:
We can now easily construct cdga's by specifying generators and their differentials. Note that a free algebra has a natural augmentation, defined as $\counit(v)=0$ for every generator $v$ and $\counit(1)=1$.