It has been said that covenant theology is at the center of Reformed theology. No doubt, this is correct. In Eden, all of humanity fell when Adam, the first of our race, rebelled against his creator and plunged the entire human race into sin and death. It will take a second Adam (Jesus Christ) to perfectly obey the commandments of God so as to fulfill all righteousness (cf. Matthew 3:15). It will also take a second Adam to remove from us the guilt of our individual sins, as well as that guilt imputed to us from our first father, Adam (cf. Romans 5:12-19). But in order for a second Adam to accomplish these things, there must be a different covenant than the covenant of works (and its demand for perfect obedience), in which God allows a second Adam to do what is necessary for us and in our place to be saved for us, and to earn sufficient merit to save us. This brings us to the covenant of grace.
The covenant of grace is the historical outworking of an eternal covenant of redemption (the so-called “covenant before the covenant”) in which the members of the Holy Trinity decreed that Jesus was to be the redeemer of those whom the Father had chosen in him, and that Jesus would do this on behalf of, and in the place of, all those sinners chosen from before the foundation of the world (cf. Ephesians 1:3-14). This means that God’s saving grace is not directed to the world in general, but to those specific individuals whom he intends to save. In this covenant of redemption, the Holy Spirit will apply the work of Christ to all those whom the Father had chosen, and for whom the Son will die, ensuring that all of God’s elect will come to faith in Jesus Christ through the preaching of the gospel–which is the divinely appointed means by which God’s elect are called to faith.
As is the case with the covenant of works, the specific terminology “covenant of grace” does not appear in Scripture, although the rich and manifold theme of covenant appears throughout redemptive history and lies at the very heart of God’s redemptive purposes and relations with humanity. As with the covenant of works, God is the author of this gracious covenant and he imposes specific conditions upon Adam and his fallen race. This covenant also includes the promise of eternal life, but is made on behalf of sinners by a gracious God who intends to save his elect from the consequences of Adam’s sin through the work of Jesus Christ–the second Adam. In the covenant of grace, everything hinges upon the sacrificial death and the perfect obedience of Jesus who is the only covenant mediator between God and humanity (1 Timothy 2:5), yet who can sympathize with us in our weaknesses having been tempted in all ways as we have, yet without sin (cf. Hebrews 3:1-6; 4:14-16).
While the condition of the original covenant of works was full and perfect personal obedience to the commandments of God, the condition of the covenant of grace is faith in Jesus Christ, who undoes the awful consequences of the fall (Romans 5:12-21; 2 Corinthians 15:20-28). The essence of this gracious covenant can be seen in the oft-repeated refrain first found in Genesis 17:7; “And I will establish my covenant between me and you and your offspring after you throughout their generations for an everlasting covenant, to be God to you and to your offspring after you.” If we fast-forward redemptive history to the final chapter, when the new Jerusalem descends out of heaven on the last day, once again we hear these wonderful words which serve as the motto of the covenant of grace. “And I heard a loud voice from the throne saying, `Behold, the dwelling place of God is with man. He will dwell with them, and they will be his people, and God himself will be with them as their God” (Revelation 21:3). Yes, he is our God, and we are his people.
Therefore, redemptive history, which is the outworking in human history of God’s eternal decree, is essentially the account of the unfolding successive covenants, which are historical manifestations of the one covenant of grace. Immediately after the fall of the human race into sin, God promised Adam that a redeemer will come and rescue him and the human race from the consequences of his sin. In Genesis 3:15, we find the first historical manifestation of the covenant of grace in the first promise of the gospel (the so-called proto-evangelium). No sooner had Adam sinned, the Lord pronounced the following curse upon the devil: “I will put enmity between you and the woman, and between your offspring and her [Eve] offspring; he shall bruise your head, and you shall bruise his heel.” In this first gospel promise, God promises to crush the serpent and to save his people. The coming of the mediator of the covenant was now ensured. Jesus will die on a cross to redeem us from our sins.
Although the covenant of grace unfolds in several historical steps–(i.e., the promise God made to Abraham in Genesis 12, 17, etc., the promises God made to Israel at Mount Sinai in Exodus 24, as well as on the plains of Moab in Deuteronomy 29:13, the promise of an eternal kingdom made to David in 2 Samuel 7:14, followed by the prophecy of a New Covenant made to Jeremiah in his prophecy [31:33], which the author of Hebrews specifically applies to Jesus Christ, the covenant mediator in Hebrews 8:1-13)–the covenant is essentially the same throughout the entire course of redemptive history. This can be seen in the simple fact that there is but one gospel in both testaments, just as there is only one covenant mediator (Jesus Christ).
God has promised to be our God, and that we are his people. These covenant promises bookend redemptive history from the fall of our race into sin, until the time of the end, when our Lord returns to raise the dead, judge the world, and make all things new.