Definition of Covenant of Grace in New Covenant Theology

The covenant of grace, as articulated within Reformed and broader Protestant theology, designates God's gracious arrangement for human salvation through faith in Christ, standing in contrast to the covenant of works established with Adam. This theological construct has been understood and applied differently across traditions, with New Covenant Theology representing one contemporary approach to covenant structure.

Classical Reformed Formulation

Reformed theology traditionally distinguishes between two primary covenants: the covenant of works and the covenant of grace. The covenant of works was "entered into by God with Adam as the representative of the human race," requiring "perfect obedience" as its condition ^[5]. When Adam failed, God established the covenant of grace as the means of redemption. Charles Hodge defines this covenant as arising from "what the Son of God covenanted to perform, and what in the fulness of time He actually accomplished," resulting in salvation being "offered to all men on the condition of faith in Christ" ^[9].

The covenant of grace, in this framework, spans both Old and New Testament administrations. While the substance remains constant—salvation by grace through faith—the administration differs. Under the gospel dispensation, this covenant "is dispensed in a more clear, spiritual, extensive, and powerful manner than of old" ^[1]. The term "New Covenant" (Luke 22:20) refers not to a fundamentally different covenant but to the fulfillment and clearer revelation of the one covenant of grace ^[1].

Testamentary Character

The Greek term diathēkē (διαθήκη), translated both "covenant" and "testament," illuminates the unilateral nature of God's gracious arrangement. John Gill notes that "the covenant of grace, as administered under the Gospel dispensation, is a testament or will," properly understood as "a covenant to Christ, and a testament or will to his people" ^[8]. This testamentary aspect emphasizes that salvation depends not on bilateral negotiation but on God's sovereign disposition of grace.

Adam Clarke similarly describes Jesus as "a surety, εγγυος, a mediator, one who brings the two parties together, witnesses the contract, and offers the covenant sacrifice," establishing "a better covenant" than the Mosaic arrangement ^[10]. The superiority lies in its spiritual efficacy and the finality of Christ's sacrifice.

New Covenant Theology's Distinctive Approach

New Covenant Theology, emerging primarily within Baptist and Reformed Baptist circles, challenges aspects of classical covenant theology while maintaining the centrality of grace. Rather than viewing the covenant of grace as a single covenant with multiple administrations, New Covenant Theology emphasizes discontinuity between old and new covenants. Proponents argue that the Mosaic covenant functioned differently than traditional Reformed theology suggests, and that the New Covenant inaugurated by Christ represents a more radical break.

This perspective maintains that believers are under the "law of Christ" rather than the Mosaic law, even in its moral dimensions, though this does not imply antinomianism. The covenant of grace, in this view, finds its fullest and most proper expression only in the New Covenant era, with Old Testament arrangements serving as types and shadows rather than earlier administrations of the same covenant.

Grace as Defining Element

Across these perspectives, grace remains the defining characteristic. Easton's Dictionary identifies grace as "God's forgiving mercy" and "the gospel as distinguished from the law" ^[3]. The covenant of grace operates on the principle that salvation comes through divine favor rather than human merit. Romans 6:14 declares believers are "not under law, but under grace," a text frequently cited to distinguish the covenant of grace from works-based arrangements ^{[6, 7]}.

The Hebrew berith and Greek diathēkē both carry covenantal weight, with berith etymologically linked to "cutting," referencing the ancient practice of passing between divided animals (Genesis 15; Jeremiah 34:18-19) ^{[2, 4]}. Yet the New Covenant transcends these ritual forms through Christ's once-for-all sacrifice, establishing an eternal covenant sealed not by animal blood but by the blood of the mediator himself.

Sources

Easton's Bible Dictionary “Easton's Bible Dictionary: New Testament — (Luke 22:20), rather "New Covenant," in contrast to the old covenant of works, which is superseded. "The covenant of grace is called new; it succeeds to the old broken covenant of works. It is ever fresh, flourishing, and excellent; and under the gospel it is dispensed in a more clear, spiritual, extensive, and powerful manner than of old" (Brown of Haddington). Hence is derived the name given to the latter portion of the Bible. (See [438]TESTAMENT.)”
Smith's Bible Dictionary “Smith's Bible Dictionary: Covenant — The Heb. berith means primarily "a cutting," with reference to the custom of cutting or dividing animals in two and passing between the parts in ratifying a covenant. (Genesis 15; Jeremiah 34:18,19) In the New Testament the corresponding word is diathece (diatheke), which is frequently translated testament in the Authorized Version. In its biblical meaning two parties the word is used-- + Of a covenant between God and man; e.g. God covenanted with Noah, after the flood, that a like judgment should not be repeated. It is not precisely like a covenant between”
Easton's Bible Dictionary “Easton's Bible Dictionary: Grace — (1.) Of form or person (Prov. 1:9; 3:22; Ps. 45:2). (2.) Favour, kindness, friendship (Gen. 6:8; 18:3; 19:19; 2 Tim. 1:9). (3.) God's forgiving mercy (Rom. 11:6; Eph. 2:5). (4.) The gospel as distinguished from the law (John 1:17; Rom. 6:14; 1 Pet. 5:12). (5.) Gifts freely bestowed by God; as miracles, prophecy, tongues (Rom. 15:15; 1 Cor. 15:10; Eph. 3:8). (6.) Christian virtues (2 Cor. 8:7; 2 Pet. 3:18). (7.) The glory hereafter to be revealed (1 Pet. 1:13).”
Easton's Bible Dictionary “Easton's Bible Dictionary: Covenant — A contract or agreement between two parties. In the Old Testament the Hebrew word berith is always thus translated. Berith is derived from a root which means "to cut," and hence a covenant is a "cutting," with reference to the cutting or dividing of animals into two parts, and the contracting parties passing between them, in making a covenant (Gen. 15; Jer. 34:18, 19). The corresponding word in the New Testament Greek is diatheke, which is, however, rendered "testament" generally in the Authorized Version. It ought to be rendered, just as the word berith o”
Easton's Bible Dictionary “Easton's Bible Dictionary: Works, Covenant of — Entered into by God with Adam as the representative of the human race (comp. Gen. 9:11, 12; 17:1-21), so styled because perfect obedience was its condition, thus distinguishing it from the covenant of grace. (See COVENANT OF [672]WORKS.)”
CCEL (Reformed (Old Princeton)) “Charles Hodge, Systematic Theology, Vol. 3, section 98: 5:9 5:9 5:10 5:10 5:12 5:12-21 5:12-21 5:16 5:16 5:17 5:18 5:18 5:18 5:18 5:18 5:18 5:19 5:19 5:19 5:19 5:19 5:19 5:19 5:21 6:1-8 6:1-23 6:1-23 6:3 6:3 6:3 6:4-10 6:5 6:8 6:14 6:14 6:14 6:14 7:1 7:1 7:1-6 7:1-25 7:2 7:2 7:3 7:3 7:4 7:4 7:4 7:4-6 7:4-6 7:6 7:7 7:7 7:7 7:7 7:7-25 7:7-25 7:12 7:14 7:24 7:33 7:34 8:1-39 8:3 8:9-11 8:9-11 8:10 8:11 8:12 8:16 8:16 8:17 8:17 8:19-21 8:19-23 8:21 8:25 8:30 8:33 8:34 8:34 9:1-33 9:4 9:4 9:4 9:8 9:8 10:3 10:3 10:4 10:8 10:9 10:9 10:10 10:10 10:10 10:11-15 10:14 10:14 10:15 11:1-36 11:6 11:11 11:11 ”
CCEL (Reformed (Old Princeton)) “Charles Hodge, Systematic Theology, Vol. 2, section 144: 2:7 2:28 2:28 3:19 3:21 3:22-23 3:25 3:25 3:25 3:25 3:25 3:25-26 3:28 4:20-21 5:1-1 5:8 5:9 5:10 5:10 5:10 5:10 5:11 5:12 5:12 5:12 5:12 5:12-20 5:12-20 5:12-20 5:12-21 5:12-21 5:12-21 5:12-21 5:12-21 5:12-21 5:12-21 5:12-21 5:12-21 5:12-21 5:15 5:16-17 5:18 5:18-19 5:18-19 5:19 6:1-23 6:4 6:4 6:9 6:14 6:23 7:1-25 7:4 7:4-6 7:32 7:32 8:1-13 8:1-39 8:3 8:7 8:9-1 8:11 8:11 8:11 8:23 8:28 8:29-30 8:29-30 8:29-30 8:30 8:30 8:30 8:32 8:34 8:34 8:35-39 9:1-33 9:1-33 9:5 9:5 9:6 9:9-21 9:11 9:11 9:15-16 9:19 9:22 9:24 10:13 10:14 10:17 11:2 11:”
Hebrews (Baptist/Reformed) “John Gill on Hebrews 9:16: For where a testament is,.... The covenant of grace, as administered under the Gospel dispensation, is a testament or will. The Jews have adopted the Greek word, here used, into their language, and pronounce it and by it understand a dying man's last will and testament (d). Some of them make it to be of Hebrew derivation; as if it was said, , "this shall be to confirm" (e), or this shall be stable and firm; though others own it to be the same with this Greek word (f). The covenant of grace, is properly a covenant to Christ, and a testament or will to his people: it i”
CCEL (Reformed (Old Princeton)) “Charles Hodge, Systematic Theology, Vol. 2, section 73: § 5 . The Covenant of Grace. In virtue of what the Son of God covenanted to perform, and what in the fulness of time He actually accomplished, agreeably to 363 the stipulations of the compact with thu Father, two things follow. First, salvation is offered to all men on the condition of faith in Christ. Our Lord commanded his disciples to go into all the world and preach the gospel to every creature. The gospel, however, is the offer of salvation upon the conditions of the covenant of grace. In this sense, the covenant of grace is formed w”
Hebrews (Methodist/Wesleyan) “Adam Clarke on Hebrews 7:22: By so much - This solemn, unchangeable oath of God, was Jesus made a surety, εγγυος, a mediator, one who brings the two parties together, witnesses the contract, and offers the covenant sacrifice on the occasion. See at the end of the chapter. A better testament - Κρειττονος διατηκης· A better covenant; called, in the title to the sacred books which contain the whole Christian code, Ἡ Καινη Διαθηκη, The New Covenant, thus contradistinguished from the Mosaic, which was the old covenant; and this is called the new and better covenant, because God has in it promised ”

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