Covenant of Works or of Grace: a matter of mediation

In his essay Galatians 5:1-6 and Personal Obligation, Dr. S.M. Baugh explains a key difference between the covenant of works and the covenant of grace.  As emphasized in the last post, perfect law keeping is the only basis for someone to be declared "justified" before the law of God.  The covenant of grace doesn't abrogate the requirement for perfect works.  Rather, it is in the covenant of grace that a mediator (the substitute law-keeper Jesus) is uniquely provided by God as the sole basis for the ungodly to receive justification by grace through faith, not as a result of their personal works but Christ's.  Dr. Baugh makes this point in this comment on Galatians 5:3: "My analysis, then has shown that Paul says that the law imposes an exacting obligation to fulfill all of its commandments and statutes personally.  One must finish off performance of the whole law as the only alternative to Christ's mediation and divine grace" (p. 275).  Earlier in the essay he explains the key difference between the two covenants:

The issue of the opposition between the covenants of works and of grace and the resolution of the common confusion surrounding these terms is that "grace" in the term "covenant of grace" and "works" in the "covenant of works" point to something very specific, namely, to whether there is substitutionary mediation in the covenant arrangement or not.  The antithesis of these covenantal commitments does not revolve around issues of God's beneficence, whether there are conditions in the covenant or not, or even the benefits of covenant relationship, but rather their difference focuses on the very narrow issue of who comes under obligation in the covenant to fulfill its stipulations: the human covenant partner himself (covenant of works) or a mediator on his behalf (covenant of grace).  This idea is expressed admirably by the seventeenth-century Dutch theologian Herman Witsius (1636-1708), who says:

• "In the covenant of works there was no mediator: in that of grace, there is the mediator Jesus Christ... In the covenant of works, the condition of perfect obedience was required, to be performed by man himself, who had consented to it.  In that of grace, the same condition is proposed, as to be, or as already performed, by a mediator.  And in this substitution of the person, consists the principal and essential difference of the covenants."

When the Mosaic law was enacted with the blood of the covenant in Exodus 24 (cf. Heb. 9:18-21), the covenant people twice recognized that they must personally fulfill the obligation imposed in this covenant: "All the terms that the Lord has spoken we will do" (Ex. 24:3) and "All that the Lord has spoken we will do, and we will be obedient" (Ex. 24:7).  In consequence, the term "covenant of works" should be thought of as a covenant of personal obligation whereas the "covenant of grace" is best seen as a covenant of mediation or even a covenant of substitutionary performance.  This is what we see in our target passage, Galatians 5:1-6.

[The Law Is Not Of Faith: Galatians 5:1-6 and Personal Obligation, pp. 262-263]

Westminster Larger Catechism:
 Question 31: With whom was the covenant of grace made?
Answer:  The covenant of grace was made with Christ as the second Adam, and in him with all the elect as his seed.

Question 32: How is the grace of God manifested in the second covenant?
Answer: The grace of God is manifested in the second covenant, in that he freely provideth and offereth to sinners a mediator, and life and salvation by him; and requiring faith as the condition to interest them in him, promiseth and giveth his Holy Spirit to all his elect, to work in them that faith, with all other saving graces; and to enable them unto all holy obedience, as the evidence of the truth of their faith and thankfulness to God, and as the way which he hath appointed them to salvation.

Question 70: What is justification?
Answer: Justification is an act of God's free grace unto sinners, in which he pardons all their sins, accepts and accounts their persons righteous in his sight; not for any thing wrought in them, or done by them, but only for the perfect obedience and full satisfaction of Christ, by God imputed to them, and received by faith alone.

Question 71: How is justification an act of God's free grace?
Answer: Although Christ, by his obedience and death, did make a proper, real, and full satisfaction to God's justice in the behalf of them that are justified; yet inasmuch as God accepts the satisfaction from a surety, which he might have demanded of them, and did provide this surety, his own only Son, imputing his righteousness to them, and requiring nothing of them for their justification but faith, which also is his gift, their justification is to them of free grace.

Question 72: What is justifying faith?
Answer: Justifying faith is a saving grace, wrought in the heart of a sinner by the Spirit and Word of God, whereby he, being convinced of his sin and misery, and of the disability in himself and all other creatures to recover him out of his lost condition, not only assents to the truth of the promise of the gospel, but receives and rests upon Christ and his righteousness, therein held forth, for pardon of sin, and for the accepting and accounting of his person righteous in the sight of God for salvation.

Question 73: How does faith justify a sinner in the sight of God?
Answer: Faith justifies a sinner in the sight of God, not because of those other graces which do always accompany it, or of good works that are the fruits of it, nor as if the grace of faith, or any act thereof, were imputed to him for his justification; but only as it is an instrument by which he receives and applies Christ and his righteousness.