James Fisher in his catechism explains a few important distinctions between the Covenant of Works and the Covenant of Grace:

“Q. 23. If both covenants, of grace and works, were exhibited on Mount Sinai, were not the Israelites, in that case, under both these covenants at one and the same time?

A. They could not be under both covenants in the same respects, at the same time; and therefore they must be considered either as believers or unbelievers, both as to their outward church state and inward soul frame.

Q. 24. In what respects were the believing Israelites, in the Sinaitic transaction, under both covenants?

A. They were internally and really under the covenant of grace, as all believers are, Rom. 6:14, and only externally, under the above awful display of the covenant of works, as it was subordinate and subservient to that of grace, in pointing out the necessity of the Surety-righteousness, Gal. 3:24.

Q. 25. In what respects were unbelievers among them, under these two covenants of works and grace?

A. They were only externally, and by profession, in respect of their visible church state, under the covenant of grace, Rom. 9:4; but internally, and really, in respect of the state of their souls, before the Lord, they were under the covenant of works, chap. 4:14, 15.”