Covenant and contract

I came across this paragraph, by Richard John Neuhaus, at First Things

"I once wrote a book on the American experiment and the idea of covenant, Time Toward Home. A covenantal understanding of America is distinct from, although not incompatible with, a contractual understanding. Most writing about the American experience, and especially about the American political order, accents that it is based on a “contract theory” of government. Contract theory has a very honorable philosophical pedigree. It is based upon a narrative, some would say a myth, about people entering into a mutually beneficial agreement or contract in order to form a government. The telling of that story by John Locke had a significant influence on the thinking of the American founders, but it was hardly the only influence, and, in subsequent history, has not been the most important influence."

Neuhaus goes on to talk about the importance of identity as an American, which is a different application of covenant than I'm used to. I'd apply it to the FV theological controversy. It is legitimate to speak of the means of our salvation as a contract. Jesus agrees to die for us; the Father agrees to reward His obedience with the inheritance of a people who are His own. This is true, but a covenantal understanding, to use Neuhaus' words, "is distinct from, although not incompatible with, a contractual understanding."

A family is in covenant with one another. Things beyond a contract are involved, like loyalty instead of tit for tat, service instead of self-interest, obligation from birth instead of only if you agree and sign on the dotted line. These kinds of things make the covenantal paradigm preferred when we talk about our salvation, though the contract paradigm is a part of the covenantal one, and has its legitimate place as well.