Mercy is not getting what you deserve - if someone has mercy upon you, that means you deserve to be condemned, but they are withholding that condemnation. Now justice is getting what you do deserve - you're worthy of condemnation, and the judge gives it to you.
Now grace is different from those two - grace is getting, positively, what you don't deserve. You deserve to be condemned, and yet God lavishes His love and His goodness upon you. Can I put it very simply? Grace says 'Yes' to the sinner, the law says 'No' - have you got it?
The Pharisees said 'No' to sinners, these so-called Bible scholars that want to tear John 8 out of our Bibles are saying 'No, you can't live any way you like and then come to for God's forgiveness, that's too good to be true!'. They say 'No', but Jesus says 'Yes', grace says 'Yes'.