It has been said that the two words in the Bible are "law" and "gospel." The point is that everything in Scripture can ultimately be placed either in the category of law or gospel. Law is anything that God requires. The law is God's commandments; His righteous demands. The gospel, on the other hand is any promise in Scripture of God's favor based entirely on God's umerited favor. Gospel is forgiveness granted to sinners by God apart from anything the sinner does. It is free grace.
If we are to properly understand the Bible, the character of God, and the nature of salvation then we must maintain a proper distinction between law and gospel. In the church, however, it is all too common for law and gospel to be mixed. Rather than being presented in all its perfection and moral terror, the law is preached as helpful principles for successful living. The Gospel, rather than being radical, undeserved grace is infused with works so that it becomes something we do. In this way, preachers have effectively inoculated men and women from an appropriate terror of the law and an equally appropriate gladness in the gospel.
I have been devouring a wonderful book by John Pless called Handling the Word of Truth. Pless writes:
"To bring the Law into the domain of the Gospel is to undermine the good news of Jesus Christ, transforming a pure gift into a human achievement. Such mingling of Law with Gospel dilutes the precious promises of God with demands for works. In short, the Gospel is polluted and rendered impotent. To use another biblical metaphor, a pinch of yeast of the Law hidden away in the dough of the Gospel ruins the whole lump. We are not left with the bread of life but with stale rations that cannot sustain those who journey through the valley of death's shadow.
"On the other hand, to mix the Gospel into the Law is to create the illusion that the Law offers hope. Inserted into the Law, the Gospel weakens but does not remove the threat of the Law. Such a blending of Law and Gospel invites sinners to place their confidence in their own efforts - 'motivated by the Gospel,' as it is said. The Law is lifted up as a set of principles or rules that may be obeyed and fulfilled with the aid of God's grace. This synthesis of Law and Gospel corrupts both, driving broken sinners either to a false security or to unholy despair...
"The Law has absolutely no power to make human beings righteous. It has nothing to say about God's grace in Jesus Christ. It cannot create faith. The faith that the Law demands is not a work that we can accomplish. Faith is purely passive, completely receptive of the gift of forgiveness bestowed by the Gospel alone...
"The Law never finds righteousness; it only confirms unrighteousness. The Gospel never finds righteousness; it only gives and bestows righteousness. The righteousness imparted by the Gospel is not one of works but of God's grace in the blood of Jesus Christ. It is a righteousness that is not achieved but received by faith alone....It is only when a person sees himself to be a genuine sinner with no hope under the Law that the Gospel will be heard as joyous news of pardon."