The usual definition for grace, "unmerited favor," is not broad enough in its scope to fully define all that is meant by the term (see Luke 2:40; Col. 4:6). W. E. Vine defense it as, "That which bestows or occasions pleasure, delight, or causes favorable regard;...on the part of the bestower, the friendly disposition from which the kindly act proceeds, graciousness, lovingkindness, goodwill generally...especially with reference to the Divine favour or grace, e.g., Acts 14:26..." (Expository Dict. Of New Testament Words, pp. 509-510).
As seen in the Bible, grace, in respect to salvation, is a summary of all God has done to effect the salvation of man. It includes all of His acts which show favor to undeserving mankind. But God's grace is more than mere passive pity. It expresses itself in real, concrete acts of love (Rom. 5:8).
Considering several New Testament passages makes it easy to see how His grace runs through all God has done for man's salvation. By grace He sacrificed His Son (Heb. 5:8-9). By grace He revealed His plan of salvation (1 Cor. 2:9-12; Gal. 1:11-12; Eph. 3:1-5). It is by grace that God raises sinners to a new life in Christ (Eph. 2:4-7; cf. Rom. 6:4-5). By His grace, God commissioned His Son to build the church (Matt. 16:18; Acts 20:28).
While grace includes all God has done to bring about the salvation of man, it excludes salvation by meritorious works (Rom. 4:4; 11:6). Salvation by works of this nature would demand a life of perfect obedience to divine law -- it would be of debt. Salvation by grace, on the other hand, bridges the gap between our imperfection and God's perfect law by means of pardon and forgiveness (1 John 2:1).
The presence and reality of sin is what makes the grace of God necessary. Since all have sinned (Rom. 3:10, 23), all, therefore, are under the sentence of death, the penalty for or the wages of sin (Ezek. 18:20; Rom. 6:23; Rev. 21:8).
God, in His matchless love, provided His Son to die in man's place (1 Pet. 1:18-19). While the grace of God is demonstrated in many ways, none is greater than its manifestation in His Son (Rom. 3:23-24). Since man has sinned, he deserves the punishment of the second death in hell and no works he could do would earn or merit his salvation from it. Therefore, salvation is that which is given by the grace of God, a favor man has not merited. Hence, salvation is the gift of God (Eph. 2:8-9).
Some have erroneously concluded from Romans 6:14-15 that we are "not under law but under grace" and that law and grace are mutually exclusive. However, the fact we are under grace does not mean we are not subject to law and that it is not essential for us to keep divine law.
We are subject to law from God. The teaching of Christ is called "law" (1 Cor. 9:21; 1 John 3:4; Isa. 2:1-3). We are required to obey that law (1 John 3:4; 2 Tim. 3:16-17; John 4:24; 1 Pet. 4:11). Whenever God has spoken to man or given a law, He has expected strict obedience and the utmost respect for His word (Deut. 4:2; Lev. 10:1-2; Rev. 22:18-19).
Grace does not mean we are not subject to law, rather, it means that we have a means of forgiveness when we violate that law, if we meet the divine conditions. The teaching of the apostle Paul in Romans 6:14-15 is that we are not under a system of mere law without grace as a means of justification. Depending on mere law would require perfect law-keeping for justification. Such would make one a legalist. Our justification is by grace through faith.
Though salvation is by grace (Eph. 2:8), it is not by grace alone. Some teach otherwise: "We believe the scriptures teach that the salvation of sinners is wholly by grace" (Standard Manual for Baptist Churches, ch. 8, art. 4). Actually, one is saved by nothing alone. The many factors of salvation include: faith (Rom. 5:1; repentance (Acts 11:18); blood (Rom. 5:9-10); works (Jas. 2:24); baptism (1 Pet. 3:21); the gospel (Rom. 1:16); confession (1 John 4:2); and grace (Eph. 2:8-9).
Salvation by grace is through the teaching of the gospel, God's "power unto salvation" (Rom.1:16). It is called "the word of His grace" (Acts 14:3) and "the gospel of the grace of God" (Acts 20:24). It is by the gospel that the kindness of God redeems man and provides him all spiritual blessings. The word is the medium of His grace (Titus 2:11-12). The word of His grace is able to build up and strengthen the Christian so that he might grow in Christ, grow unto salvation (Acts 20:32; 1 Pet. 2:1-2).
But God's grace is conditional. It is conditioned upon obedient faith made perfect by works (Eph. 2:8-9; Rom. 5:1-2; Jas. 2:17-26; Matt. 7:21). The obedient works upon which salvation is conditioned do not nullify grace for they do not earn salvation. The examples of Naaman (2 Kings 5) and the blind man (John 9:6-7) show that these gifts were given by grace but conditions had to be met to receive them.