The covenant of grace is the historical outworking of God’s eternal plan of salvation in the covenant of redemption. As we learned in chapter 1, the covenant of redemption was made in eternity among the persons of the Trinity and fulfilled in time through Christ’s active obedience and atoning death. It was for Christ a covenant of works . Just as there was a covenant of works with the first Adam, there was also a covenant of works with the second Adam, Christ. His obedience under this covenant is the foundation of the gospel and the covenant of grace. The covenant of grace is essentially the application to sinners of the benefits earned by Christ through his fulfillment of the covenant of redemption. In this covenant, because of Christ’s obedience, God brings his people into communion with himself and promises them, “I will be your God, and you will be my people.” His promise is not on the basis of their obedience, but on the basis of Christ’s obedience. It was works for Christ so that it is grace for us. “For as by the one man’s disobedience the many were made sinners, so also by the one man’s obedience the many will be made righteous” (Rom. 5: 19).
Like the covenant of works, the covenant of grace is made between God and humans. One of the chief differences between these two covenants, however, is that the latter has a Mediator between God and his covenant partners, whereas the former does not. Christ is that Mediator (1 Tim. 2: 5). This makes the nature of these covenants very different from one another. As was shown in chapter 2, the covenant of works is based on law and requires perfect , personal obedience. Its condition is , “Do this and you will live” (cf. Lev. 18: 5; Gal. 3: 12). The covenant of grace, on the other hand, is based on God’s promise to save sinners. Its condition is, “Believe in the Lord Jesus Christ, and you will be saved” (Acts 16: 31; cf. Rom. 10: 6– 13; Gal. 2: 16). In the covenant of grace, God pronounces sinners justified and righteous on the basis of the righteousness of Christ imputed to them and received through faith alone.
Brown, Michael G.; Keele, Zach (2012-05-29). Sacred Bond; Covenant Theology Explored (Kindle Locations 885-900). Reformed Fellowship, Inc.. Kindle Edition.