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Covenant Theology is the core doctrine of the Reformed faith, whether Presbyterians or (traditional) Baptists. The understandings of the covenants is the primary distinction between the two groups. Both sides agree in the Covenant of Works, which is that God made a Covenant with Adam in the Garden. If Adam obeyed than he (and his posterity) would have gained eternal life. Adam failed, so we needed a new representative. We need one who could fulfill that covenant for us, since the curse of sin prevented any of us from perfect obedience ourselves. That is what both sides call the Covenant of Grace. Jesus fulfills that role as our federal head and representative. It was not just his death on the cross, but his active obedience that allow us to gain eternal life. His righteous life is imputed (credited) to us and is looked upon as if we had done it.
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