The following post was taken from Ligonier.org and explains Covenant Theology or the Covenant of Grace.
What Is a Covenant?
by Mark Jones
All true theology is based on some form of a divine covenant. The Christian religion must be understood covenantally, for that is how God has chosen to relate to man, whether in the garden or after the entrance of sin into the world. The goal of all divine–human covenants is summed up in the words found throughout the Bible: “I will be your God and you will be my people, and I will dwell among you” (Ex. 6:7; 29:45; Ezek. 11:20; 2 Cor. 6:16; Rev. 21:3).
What Is a Covenant?
Scholars have defined covenant—translated from the Hebrew berith and the Greek diathēke—in various ways, and the context in which the word is used in Scripture will also inform our understanding of its meaning. At its most basic level, a covenant is an oath-bound relationship between two or more parties. Thus, human covenants (for example, marriage) fall under this general definition. In divine covenants, God sovereignly establishes the relationship with His creatures. There are other nuances, but a divine covenant given after the fall is, fundamentally, one in which God binds Himself by His own oath to keep His promises.
Still, there are conditions attached to that oath on the human side. If the human party involved in a covenant with God does not keep the covenant’s conditions, there will be consequences. When Adam and Eve broke the commandment that they should not eat from the Tree of Knowledge of Good and Evil, they suered numerous consequences (Gen. 3:16–19). After the fall, the conditions of the Lord’s covenants with man are ultimately met by God Himself. For example, in Genesis 15, God swears that He will keep the conditions of His covenant with Abraham and will bear the consequences of Abraham’s breaking it. This does not mean the human conditions are irrelevant. We must trust in the Lord to benefit from His covenant promises. Abraham responded in faith: he “believed the Lord, and he counted it to him as righteousness” (v. 6), and the Lord blessed him. Even here, however, God by His Spirit grants to His elect the response of faith that they must exercise. God guarantees that His people will fulfill the condition of faith, and so guarantees our fulfillment of our covenant obligations Himself (Eph. 2:8–9).
In Scripture, there is explicit mention of several divine covenants, including those made with Noah (Gen. 6:17), Abraham (Gen. 15–17), David (2 Sam. 7), Moses and the Israelites (Ex. 19–24), and Christ (Heb. 8–9). All of these biblical covenants are part of the one covenant of grace—the covenant God made with man after the fall. This covenant of grace was the promise to Adam of the coming seed of the woman who would crush the head of the serpent (Gen. 3:15).
The Old Covenant
Though many post-fall covenants emphasize God’s promise to fulfill the covenant conditions, other covenants emphasize human response almost as strongly. One post-fall covenant stands out in this respect: the old covenant made with Israel. This was the covenant made under Moses between God and His people at Mount Sinai (Ex. 19–24). Some theologians have labeled this covenant as a lawcovenant in opposition to promise covenants, such as the Abrahamic or new covenant. However, this sharp distinction between law (conditional) and promise (unconditional) covenants often creates more problems than it solves in terms of understanding God’s covenants with humanity.
The fact is that the old covenant, among other things, served as a guide to point people to Christ (Gal. 3:24). For example, Christ’s words in Matthew 26:28 (“my blood of the covenant”) have a rich Old Testament background. The words primarily relate to Exodus 24:8, when Moses took the blood and threw it on the Israelites as a symbolic act of their sin being cleansed by God. Also, there is an emphasis on eating and drinking in Exodus 24 (see v. 11), which correlates well with the words and actions of Jesus in the Lord’s Supper.
With this in mind, the question must be asked: was the old covenant, administered in the time of Moses to God’s people, a gracious covenant or not? Was it essentially conditional in contrast to an essentially unconditional new covenant? To answer this, we must understand the old covenant in its larger context, particularly chapters 17–24 of Exodus. Chapter 19 shows that the Israelites were the recipients of God’s salvation, not just physically from Egypt but spiritually, too (vv. 4–6). The obedience of the Israelites (vv. 7–8) was not commanded in order that they might be redeemed, but because they had been redeemed (Ex. 18:10).
The Ten Commandments are given in chapter 20. The Israelites promise obedience to God’s commandments in the context of the covenant not only in 19:8, before the giving of the Ten Commandments, but also in 24:3, 7. After the Israelites’ declaration of promised obedience in 24:7, Moses sprinkles blood on the Israelites, and they also eat together (24:8, 11). Therefore, the Ten Commandments occur in the context of a covenant administration, but the precepts of the Ten Commandments are only part of the old covenant, not the sum total of it. God first saved His people and declared them to be His treasured possession (see Deut. 26:18).
There is no question that law is prominent in the old covenant. But it would be a grave misconception to suggest that grace is not also prominent. God’s people are sprinkled with the blood of the covenant. Additionally, when the Israelites came into God’s presence to eat and drink (a foreshadowing of Christians in the new covenant), it was not because of their obedience to the law, but because of God’s grace. After all, there had not been time for the Israelites to prove their obedience (or lack thereof). The approach forbidden in chapter 19 is allowed in chapter 24 because Israel had been sprinkled with the blood (that is, their sins had been atoned for), not because they had proven themselves obedient to all that was commanded.
Persevering in the covenant was contingent upon faith and obedience, but that does not mean grace was absent. Obedience is the visible ratification of the genuineness of faith; grace and faith are organically related as “root and fruit” in a way that shows marked continuity between the old and new covenants. After all, it was Christ Himself who said to His disciples, after describing Himself as the true vine: “If you keep my commandments, you will abide in my love, just as I have kept my Father’s commandments and abide in his love” (John 15:10).
So, the difference between the old and new covenants is not that the old covenant had conditions for the people and the new covenant does not. Under the old covenant, the people had to put their faith in God and show their faith by their obedience while remembering that God alone—not their obedience— saved them. Furthermore, the difference is not that the new covenant has grace and the old covenant did not. Redemption always comes before God’s call to obey Him (Deut. 7:6–8; 9:6; Eph. 2:8–10; James 2:14–26). In Romans 4, Paul uses Abraham and David as models for how someone is justified by faith alone. There is absolute continuity on this point—we are saved only by faith in Christ.
The Weaknesses and Strengths of the Old Covenant
But before Christ came “in the fullness of time” (Gal. 4:4), “at the end of the ages” (Heb. 9:26), the Israelites only had shadows of heavenly things (Heb. 8:5). They had promises, but today we have fulfillment (Heb. 8–9). The point of Hebrews 9 is to show that Christ’s death is efficacious and provides the basis for peace of conscience. The repetitions of old covenant sacrifices could not give the Israelites the same peace of conscience that we have because of Christ’s fulfillment. This, no doubt, affected their ability to obey God.
Moreover, because of fulfillment, the Holy Spirit is poured out in a manner that Israel did not—indeed, could not—know. It is not that salvation did not occur under the old covenant. It did. But the new covenant is “better”; the Spirit’s outpouring is more intensive—and extensive— because Christ has received His rewards (Acts 2:33–36; Eph. 4:8). The old covenant played an important role in redemptive history. The sprinkling of blood in the old covenant is one of several types, or foreshadowings, in that covenant that point to the person and work of Christ, which explains why the Westminster Confession speaks of the “promises, prophecies, sacrifices, circumcision, the paschal lamb, and other types and ordinances” as “foresignifying Christ to come” (7.5). These types in the “time of the law” were, for the Jews, “efficacious, [only] through the operation of the Spirit, to instruct and build up the elect in the faith in the promised Messiah, by whom they had full remission of sins.”
The Big Picture
The old covenant played a vital role in the history of redemption as it showed Israel three things: (1) how they ought to live and worship; (2) their need for a Savior because of their sins; and (3) the grace of God in revealing Himself to them and calling them His “treasured possession.”
The big picture of the covenant of grace, which structures the history of redemption, always maintains the focus on God’s desire to relate to His people, and ultimately to dwell among them and in them. He does this preeminently by His Spirit through His Son, Jesus Christ (Eph. 3:17).