It’s not unusual for evangelicals, which movements have been heavily influenced by Anabaptist theology, piety, and practice since the early 19th century. In that case we would not expect them to be aware of the categories “covenant of works” and “covenant of grace,” not to mention the “covenant of redemption” between the Trinitarian persons from eternity. In that discussion, as we say now, it is a matter of introducing folk to the hundreds of times the Hebrew scriptures and the two dozen or so times the NT speaks of “covenant” and then working through the different ways Scripture uses those terms and the use to which the Reformed theologians and churches have put that teaching to explain the law, the gospel, and the unity of salvation in redemptive history.
Among those dispensationalists still holding on to the pre- (classic) and post-Ryrie (revised) versions of dispensationalism, there is some awareness of covenant theology but, in my experience, there is very little direct contact with the primary sources of Reformed covenant theology. This lack of familiarity with genuine covenant theology is often combined with a strong hostility toward Reformed covenant theology because it is rightly perceived as a competitor to dispensationalism.
In recent years, however, typically in dialogue with Baptists over the question the continuity of the New Covenant with the Abrahamic covenant, the suggestion has been made that there is really no such thing as a “covenant of grace,” that there is no one, unified promise of salvation administered variously in the history of redemption. It seems to me that this move harkens back to the original Anabaptist impulse to defend their view of believer’s baptism (only) even at the cost of radically bifurcating the Scriptures and doing away with historic Christian notions of the unity of salvation. This argument is usually part of a move to highlight the ways in which the Abrahamic covenants were like the Mosaic. If our Baptist friends can turn Abraham into Moses, then they can be done with him and with the problem of continuity between the New Covenant and the Abrahamic.
What do Reformed folk mean when they say “covenant of grace”? In our understanding of Scripture there are three primary covenants, each of which comes to expression in redemptive history. The first is the covenant of redemption (pactum salutis) between the Father, the Son, and the Holy Spirit made from eternity wherein the Father gave to his Son a people, the Son agreed to save those people and (implicitly) the Spirit agreed to apply redemption to those for whom Christ obeyed and died. Reformed writers appeal to texts such as Psalm 110, Isaiah 53, and John 17. For more on this see the chapter on this topic in Covenant, Justification, and Pastoral Ministry.
The covenant of redemption was worked out in history in two covenants, the covenant of works (foedus operum) and the covenant of grace (foedus gratiae). The covenant of works is connected to the covenant of redemption in the Son’s promise to obey on behalf of those whom the Father gave to him. The covenant of grace is is connected in the gracious promise to and provision made from all eternity. In this sense, the covenant of grace can be said to be with the elect, in Christ, from all eternity. It was works for the Son and grace for us who receive his benefits by grace alone, through faith alone, in Christ alone.
The covenant of works first appears in Scripture, in the promise of eternal blessedness to our first parents on the condition of perfect obedience to the law. We confess that God voluntarily condescended to make this promise and that we were capable, before the fall, of fulfilling that commandment and of obeying that law. It was a legal covenant. The instrument by which the promised blessings were to be received was works and the the ground of our acceptance by God was to be our obedience. Reformed writers have understood the trees in the garden to be symbolic and even sacramental of this covenant. The law was expressed in the prohibition (Gen 2) against eating of the tree of the knowledge of good and evil. We have interpreted Adam’s federal relation to all humanity in light of Paul’s explanation in Romans 5:12–21. In the fall, Adam broke the law and the covenant of works.
The covenant of grace also promised eternal blessedness and fellowship with the Triune God but its condition was not our obedience but rather it was conditioned upon the promised obedience of a substitute or Mediator, the “seed of the woman” (Gen 3) who would crush the head of the serpent. The instrument by which sinners receive the benefits promised is faith in the promised seed-mediator-substitute. Thus, the principles of the covenants of works and grace are radically different. In a legal or works covenant, the benefits are given to on the grounds of obedience and through obedience. In a gracious covenant the benefits are given freely, unconditioned by our obedience and received through resting in or receiving the promised One.
According to Reformed covenant theology, the unfolding history of redemption is the history of two seeds and two covenants, the seed of the serpent and the seed of the woman, the broken covenant of works and the covenant of grace. From Adam to Noah, the story is of the consequences of the fall and of the corruption of humanity, a cataclysmic judgment against sin and the redemption of the remnant people of God. That cycle plays out again and again as the promise of the covenant of grace is administered through types and shadows under Noah (Gen 6), under Abraham (Gen 17), under Moses, under David, during the exile, and finally fulfilled by Jesus the Messiah.
The covenant of works continues to be administered in history through natural revelation (Rom 1 and 2) and through the institution of the Mosaic theocracy in the 613 commandments. Reformed folk have differed over exactly how to speak of the relationship between the Mosaic (Old) covenant and the covenant of works but classic Reformed writers appealed to Moses regularly as proof of the existence of the covenant of works with Adam because the legal character of the Mosaic administration of the covenant seemed so clear. They saw in Moses reflections of the same sort of law under which Adam had been placed. They regularly described the Mosaic covenant as a “legal covenant.” By this, however, they never implied or meant to say that believers under the Mosaic (old) or Davidic covenants were saved by works or accepted by God on the basis of their performance. No, the Reformed churches and theologians consistently taught that there is one covenant of grace, grounded in God’s eternal will to save, in the covenant of redemption, that has been administered in a variety of ways through the history of redemption. Nevertheless, in a powerful way, the Mosaic, Old covenant was a witness to the continuing demand of the law: “cursed is everyone who does not continue to do everything written in the book of the law” (Deut 26; Gal 3:10). Thus, Paul in Galatians 3 and 4 juxtaposed the Abrahamic and Mosaic covenants, in that way, as reflecting different principles.
The covenant of grace never went away. The addition or imposition of the Mosaic covenant 400 years after Abraham did not change God’s promise to redeem his people. It came to expression temporarily through a national people, through an elaborate system of types and shadows, of sacrifices, buildings, priesthoods, and laws but underneath and in the midst of it all, was the promise made to Adam to send a redeemer and the promise to Abraham to be a God to him and to his children.
Paul picks up on the Abrahamic promise particularly to make the point that what makes one a true “Israelite” is not circumcision but faith. He appealed to Abraham as the father of all who believe (Rom 4), whether circumcised or uncircumcised. Even though there were typological (land) and even national elements in the promises given to Abraham (Gen 12 and 15) they were only temporary expressions of the more fundamental promise to send a Savior.
This is why our Lord characterized his salvation as a “new covenant” which was to be ratified in his own blood (Luke 22:20). He was the fulfillment of the promise made to Adam and Eve. He was the last Adam (1 Cor 15:45). He was the Mediator of the New Covenant (Heb 9:15) and the lamb over whose body and in whose body the New Covenant would be made. That New Covenant was a ratification and renewal of the promise made so long ago in the garden. According to Jeremiah 31 and Hebrews chapters 7-10, the new covenant was “new” relative to the Mosaic covenant. It would not be like the Mosaic. It would not have 613 laws. It would have a different character. The paradigm of the New Covenant was not Moses but Abraham. The New Covenant is a renewal of the original promise and specifically of the Abrahamic promise in light of the advent of the Son.
The words “covenant of grace” may not appear in Scripture as such but there is a gracious covenant administered over thousands of years in types and shadows before the incarnation and administered in light of their fulfillment and reality in Christ for more than 2,000 years since. A covenant is promise of blessing with conditions and instruments. The covenant of works had its condition and instrument, which our Lord himself fulfilled. He earned God’s favor and his benefits for us. The condition of the covenant of grace has been fulfilled by Christ and the instrument through which we receive the promised benefits is now as it was for Adam, Noah, Abraham, Moses, David, and the prophets: faith in Christ and that faith too is God’s free gift so that none of us can boast except in Christ and in what he did for us.