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What’s the difference between a covenant and a contract

The word covenant means more than you think it does. Although there are similarities between a contract and a covenant they are nothing alike. One says, "I will," vs, "If you." One says, "I Promise," vs, "You agree." One is forever and the other limited by time and easily terminated.
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Contracts and covenants aren’t typical Sunday morning conversations for Pastors.  When most people think of the word covenant, they picture the Old Testament.  They think about when God makes a covenant with Abraham; it’s a pretty gruesome scene with animals being cut in half.

Likewise, I can’t think of a single sermon I’ve ever heard regarding contracts.  A contract is a word that often represents a bunch of paperwork that we know we should read but don’t.  While we might think that this is something for lawyers, contracts have been around for almost as long as covenants.  Long before contracts went on for hundreds of pages, they were a time for one party to exchange goods, services, or land.  Often contracts were sealed with a thigh grab, a sandal slap, or in some cases a wedding.

Since we’ve all seen contracts before let’s start with what a contract is.

What is a contract?

I practiced real estate for 15 years.  I can tell you that understanding contracts is one of the places where having the right agent can make you money or cost you greatly.  Most of us have dealt with contracts before, but most people focus on the terms of the agreements and not the other components that make a contract enforceable.  The terms are basically what you and the other party agree to, such as the price of a house.  However, what makes a contract enforceable is that it has a time limit, clauses, and of course, signatures by all parties.

The key components of a contract

While not all contracts feel fair, a contract is an agreement between two or more parties.  All contracts are performance-based.  If one party doesn’t live up to their end of the agreement, they could lose the deal altogether or worse, end up in front of a judge.

  • Time-Bound – A contract must have a time limit.  This time limit gives a deadline to evaluate the performance of both parties.  After this deadline, both parties usually have options to sue, terminate, or renegotiate. Without a time limit, there is no way for a judge to determine if someone will perform on the contract.
  • Clauses – All contracts have “if, then” type clauses.  One party must do something for the other party.  If one party fails to perform, the other party has options here to sue, terminate or renegotiate.  In practice, clauses are put into a contract to add special conditions under which a party can remove themselves from a deal without harming themselves.  A good example of this is an inspection clause.  In real estate, an inspection clause allows the buyer to inspect a property and to terminate the contract and walk away without consequence.
  • Signature – All parties have to sign the contract for it to be enforceable.  Their signature is a sign that the deal is agreeable and that they can accept responsibility for it.

When comparing a modern-day contract to a Biblical covenant, it might look very similar.  There’s an agreement with some stipulations.  So, what’s the difference?  Let’s look a bit closer at a covenant.

What is a covenant?

The five key covenants of the Bible are with Noah (Never to flood the earth – Gen 9), Abraham (Blessings to him for generations – Gen 15 ), Moses (Holy Nation – Ex. 19:5-6), David (Royalty – 2 Chronicles 7:18), and finally Jesus (New Covenant – Jer 31, Luke 22:20, Heb. 7:22).  If you study the covenants, you’ll see that after Noah, God’s covenants required men to do certain things in order to receive the gifts of these promises.  However, with Jesus’ birth, death, and resurrection, God replaces these covenants with a new one.  A new covenant that only requires acceptance of it.

From these five Biblical covenants, we can see that a covenant is a one-sided agreement where one party promises to do certain things forever.  A covenant can be given without anything given in return (Noah) or given with an exchange of another covenant (Abraham, Moses and David).  Whereas two parties sign a contract, with covenants, two parties exchange promises.  The big difference is even though a commitment is asked of the other party, their fulfillment of this commitment does not affect the covenant.

Instead of “if, then”, as in “if you do this, then I’ll do this,” a covenant says, “I will.”  If I covenant or promise to always love my children, their actions do not change this.  Should they do something illegal and be put in jail, this does not change my love for them.  It removes them from my immediate presence, and they can no longer experience this love, but it doesn’t change my promise.

When Israel failed to live up to their side of the agreement and they failed often, God did not abandon His side of the covenant.  In Israel’s case, they often fell out of a relationship with God.  As part of the covenant, He was always there waiting for them to return, but it was their heart that was turned away from Him.

The key components of a covenant

From examining those 5 covenants, we learned that the key components of a covenant are:

  • One-sided – Whether the other party lives up to their agreement has nothing to do with the promise.  The promise is available for anyone that accepts the conditions of the covenant.
  • Forever – A covenant is forever.  It’s not bound by a time limit and is not terminated should the other party fail to live up to the obligations.
  • A Sign – An outward sign of acceptance.  Biblically, a sacrifice of something of value solidified the agreement, except in the case of Noah’s rainbow.

Why Covenant vs Contracts Matter

When you understand the difference between contracts and covenants, you understand in greater detail what God is actually offering you through salvation.  A contract says, “if you do these things, then we’ll complete the transaction and move on.  However, if you don’t I will terminate this contract and/or seek to hurt you.”  A covenant says, “you only need to do these things in order to receive this promise.  Should you fail to do these things, there might be consequences but you can always come back and receive the benefits of this promise.”

If you openly declare that Jesus is Lord and believe in your heart that God raised him from the dead, you will be saved. 10 For it is by believing in your heart that you are made right with God, and it is by openly declaring your faith that you are saved.Romans 10:9-10 NLT

In other words, a contract is performance-based, and a covenant is acceptance-based.  Another way to say it might be, a contract is transactional and a covenant is relational.  These differences matter because it matters that you know that you don’t have to be “good enough” to “earn” salvation.  Salvation is a gift or if you will, a covenant, to accept.

While the Old Testament covenants had commandments, the New Testament covenant only has one requirement, believe.  Next week we’ll look at covenant vs contract as it relates to marriage and why that distinction is crucial for any marriage.

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