*Covenant refers to the act of God in freely establishing a mutually binding relationship with humankind. Through the covenant God bestows blessings on humans in conditional and unconditional terms. Conditionally, God blesses humans as they obey the terms of the covenant. God made covenants with Noah, Abraham, Moses and David. But above all, God has fulfilled these covenants and has inaugurated the New Covenant in Christ, which is for all people who trust in Him (Heb 9: 15, 27-28). Covenant theology is the system of theology that centers on God as a covenant-making God and sees in the history of creation two great covenants: the covenant of works and the covenant of grace. Covenant theology asserts that prior the the Fall God made a covenant of works with Adam as the representative of all humankind. In response to Adam’s disobedience God established a new covenant through the second Adam, Jesus Christ. Those who place their faith in Christ come under the benefits of this new covenant of grace.
*Stanley J. Grenz, David Guretzki &, Cherith Fee Nordling, Pocket Dictionary of Theological Terms (Downers Grove, IL: InterVarsity Press, 1999), p. 132