What is a divine covenant? A basic definition of a divine covenant is as follows: A divine covenant is a relational arrangement, initiated by God’s sovereign dispensing of his kindness, goodness, and wisdom toward man. In other words, divine covenants start with God and come to man. They come from him to us. In this sense, they are not contracts or pacts between two equals. There are no negations between God and man concerning these covenants. Divine covenants are the means through which God reveals his kindness, goodness, and wisdom to man. The specific concern of divine covenants, in the words of Nehemiah Coxe, is “the benefits [God] will bestow on [man], the communion [man] will have with [God], and the way and means by which this will be enjoyed by [man].” Divine covenants are concerned with the benefits God’s bestows, the type of communion man may have with God, and the means to obtain these things. When divine covenants demand conditions of obedience on man’s part, they can be viewed as covenants of obedience or works. When a divine covenant provides all it requires, it is a covenant of grace. In the discussion below, you will notice that I view the Old Covenant as a conditional covenant, a covenant of works, and the New Covenant as the covenant of grace.
Our second question is: What is the New Covenant in contrast to the Old Covenant? To answer this question we will look at how the Old Testament promises the New Covenant and how the New Testament explains and applies the New Covenant. Consider Jeremiah 31:31-34, which says:
31 “Behold, the days are coming, says the LORD, when I will make a new covenant with the house of Israel and with the house of Judah– 32 “not according to the covenant that I made with their fathers in the day that I took them by the hand to lead them out of the land of Egypt, My covenant which they broke, though I was a husband to them, says the LORD. 33 “But this is the covenant that I will make with the house of Israel after those days, says the LORD: I will put My law in their minds, and write it on their hearts; and I will be their God, and they shall be My people. 34 “No more shall every man teach his neighbor, and every man his brother, saying,’Know the LORD,’ for they all shall know Me, from the least of them to the greatest of them, says the LORD. For I will forgive their iniquity, and their sin I will remember no more.” (NKJV)
This New Covenant is promised to be revealed as a covenant and be formally or historically inaugurated in the future (v. 31). This covenant is “not like the covenant” at Sinai, a covenant which could be and was broken by Old Covenant Israel (v. 32). The New Covenant cannot be broken. The New Covenant secures various blessings for all in the covenant–(1) the law written on the heart (v. 33), (2) the universal saving knowledge of God within the covenant community (v. 34a), and (3) the universal forgiveness of sins within the covenant community.
Another Old Testament text which speaks about the New Covenant is Jeremiah 32:40. The LORD says through Jeremiah, “And I will make an everlasting covenant with them, that I will not turn away from doing them good; but I will put My fear in their hearts so that they will not depart from Me.” Notice the language of “everlasting covenant” (cf. Isa. 61:8; Heb. 13:20). God will not turn away from those in this covenant, like he did when Old Covenant Israel broke the covenant, turning away from him. God will work in hearts and none in this covenant will turn away from him.
Finally, consider Ezekiel 36:24-27. This is clearly a promise of the New Covenant.
24 “For I will take you from among the nations, gather you out of all countries, and bring you into your own land. 25 “Then I will sprinkle clean water on you, and you shall be clean; I will cleanse you from all your filthiness and from all your idols. 26 “I will give you a new heart and put a new spirit within you; I will take the heart of stone out of your flesh and give you a heart of flesh.27 “I will put My Spirit within you and cause you to walk in My statutes, and you will keep My judgments and do them.
Everyone in this covenant is forgiven of all their sins (v. 25). Everyone in this covenant has a new heart (v. 26). Everyone in this covenant possesses the Spirit of God as the effective cause of their obedience (v. 27).
Everything promised by the New Covenant is given. Several times God says, “I will.” The result of those “I wills” is pardon of sin, a new heart, and power to obey the law of God. Everything required is provided. In this sense, the New Covenant is not like the Old Covenant. The blessings of the Old Covenant were conditioned upon Israel’s obedience to the law of Moses (cf. Exod. 19:5-6 and Lev. 26:3ff.). In the New Covenant, God bestows all the blessings of the covenant upon all its members. As a result of what God does to them and in them, they obey. However, their obedience is not a condition to be met in order to be blessed; it is the result of having been blessed. It is the fruit of covenant membership not the condition.
The New Testament confirms this understanding of the New Covenant. The New Covenant is formally or historically inaugurated by the shed blood of Jesus Christ (see Matt. 26:26-29 [Mark 14:22-24]; Luke 22:19-20). In Matthew 26:28, Jesus said, “For this is My blood of the new covenant.” In other words, Christ brings the blessings of the New Covenant to us through what he does for us. The blessings of the New Covenant are conditioned upon what Christ does, not us. Its blessings are enjoyed by those in the church–Jew and Gentile (2 Cor. 3:1-3, 6). Its virtue is that by which all true believers were saved prior to its formal, historical inauguration. Listen to Hebrews 9:15 and 10:1-4.
15 And for this reason He is the Mediator of the new covenant, by means of death, for the redemption of the transgressions under the first covenant, that those who are called may receive the promise of the eternal inheritance. (Heb. 9:15)
1 For the law, having a shadow of the good things to come, and not the very image of the things, can never with these same sacrifices, which they offer continually year by year, make those who approach perfect. 2 For then would they not have ceased to be offered? For the worshipers, once purified, would have had no more consciousness of sins. 3 But in those sacrifices there is a reminder of sins every year. 4 For it is not possible that the blood of bulls and goats could take away sins. (Heb. 10:1-4)
Anyone saved prior to the formal or historical inauguration of the New Covenant were saved by its saving virtue. This is why the 2nd LCF says in 8.6, “Although the price of redemption was not actually paid by Christ till after his incarnation, yet the virtue, efficacy, and benefit thereof were communicated to the elect in all ages, successively from the beginning of the world, in and by those promises, types, and sacrifices wherein he was revealed, and signified to be the seed which should bruise the serpent’s head; and the Lamb slain from the foundation of the world, being the same yesterday, and to-day and for ever.”
The New Covenant is permanent, unlike the Old Covenant (Heb. 8:7, 13; 13:20-21; cf. Isa. 61:8). It is better than the Old Covenant because it has better promises (Heb. 8:6). It ensures the justification, adoption, sanctification, and glorification of all its participants.
11 But Christ came as High Priest of the good things to come, with the greater and more perfect tabernacle not made with hands, that is, not of this creation. 12 Not with the blood of goats and calves, but with His own blood He entered the Most Holy Place once for all, having obtained eternal redemption. (Heb. 9:11-12)
The benefits of redemption include justification, adoption, sanctification, and glorification and these benefits are enjoyed by all in the New Covenant. It is all of grace, apart from any and all works of the law (Gal. 2:16 and Eph. 2:8-9). We do not receive these benefits of redemption by doing to earn but by believing in Christ. It is not conditioned upon our obedience to God’s law.
The saving efficacy of the New Covenant is based on what Christ did for us and has nothing to do with what we do for Christ. It secures all the blessings promised by it through the work of Christ. Christ earns the blessings of the covenant by obeying (Rom. 5:19; Phil. 2:8; Heb. 10:5-10). He fully satisfies all the demands of God’s law. He also exhausts damnation for us on the cross (John 19:30; Rom. 3:25-26; Heb. 1:3). He earns the gift of the Spirit for us as well (Acts 2:33). And He confers upon believers in the gospel all these benefits through faith alone (Eph. 2:8-9). The New Covenant is a gracious covenant, the covenant of grace.
The difference between the Old and New Covenant is not one of an administration of the same covenant (e.g., from stage one to stage two or from a legal administration to a gracious administration of the same covenant). The difference between the two is one of kind or essence. The Old Covenant demands obedience to secure its temporal blessings or promises; the New Covenant confers its blessings or promises, which are eternal. The promised blessings of the Old Covenant depended on the obedience of its citizens; the promised blessings of the New Covenant depend upon the obedience of Christ. The Old Covenant is conditional for its citizens; the New Covenant is unconditional for its citizens. The Old Covenant is temporal; the New Covenant is eternal.Richard C. Barcellos Grace Reformed Baptist Church Palmdale, CA .
 Nehemiah Coxe and John Owen, Covenant Theology: From Adam to Christ (Palmdale, CA: Reformed Baptist Academic Press, 2005) 36.