What is Law & Gospel?
The Bible is properly understood according to two doctrines that it displays - The Law and The Gospel. God uses the Law to show us our sinfulness. When we become aware of our sin through the Law, however, that Law has no means of helping us to keep it. It simply mirrors our condition and declares us guilty of failing to keep all of God’s law in thought, word and deed (Romans 3:19-20).
In contrast, the Gospel shows us what God did to save us from our sinful rebellion and our ignorance of and disregard for God’s law. God saves us by repenting us and calling us to faith in Jesus Christ, whose suffering, death and resurrection atoned (or covered) our sin and who has imputed (or credited) His perfect sinlessness to us.
Where the Law can only declare you guilty, Jesus is able to declare the guilty forgiven. (John 5:39 ; 20:30-31; Romans 4:5 ; 10:17; 2 Timothy 3: 15ff; and 1 John 1:8-9).
Law and Grace, a woodcut by Lucas Cranach the Elder, a Lutheran. The left side of the tree illustrates law, while the right side illustrates grace.