Clearly, the Mosaic covenant called for evangelical obedience founded on gospel conversion (Deut. 30:10). How then is its conditional form consistent with this evangelical nature? ... By walking in gospel obedience they would retain their present inheritance and receive the Messianic inheritance at his coming. This teaches the necessity of gospel obedience unto complete salvation. ...
Thus the Mosaic covenant was not a proclamation of works righteousness, but of gospel sanctification.(Greg Nichols, Covenant Theology: A Reformed and Baptistic Perspective on God's Covenants, 234)
The Mosaic Covenant is clearly conditional. How one deals with the conditionality in the Mosaic Covenant does affect to some extent one's soteriology. Greg Nichols has decided that the conditionality in the Mosaic Covenant refers to the necessity of evangelical obedience for sanctification. However, is that even a plausible interpretation of the Mosaic Covenant?
We note that in the Mosaic economy, blessings come with obedience and curses with disobedience. What is important to notice here is that the sanctions for disobedience in the Mosaic economy include death (Deut. 30:18), and obedience grants life (Deut. 30:20). Leviticus 18:5 states that the way to life is obedience of God's commands, and this verse is cited in the New Testament in Galatians 3:11 as the means of salvation "under the Law," which is contrasted with the way of salvation that is by faith, for "the law is not of faith" (Gal. 3:12). In other words, the Scriptures seem to proclaim that the life promised under the Mosaic Covenant is (1) not of faith, (2) actually merited by obedience unto salvation. We also note that God does not punish with eternal death the misdeeds of His children, but merely chastise them for our good (Heb. 12:3-11). To render death for disobedience is certainly not compatible with the way God treats His wayward children.
What this proves is that the obedience in the Mosaic economy cannot be evangelical obedience, but legal obedience. Yes, we understand the graciousness of the giving of the Mosaic Covenant, but that is different from stating whether the stipulations and conditions IN the Mosaic Covenant are in fact evangelical or not. To predicate life upon obedience and death upon disobedience can never be about evangelical obedience. If, as Nichols put it, this conditionality teaches "the necessity of gospel obedience unto complete salvation," and thus "gospel sanctification," then does this mean that one can lose one's salvation ("death" under the Mosaic system) if one disobeys God? Are Christians in by faith, but stay in by covenantal faithfulness? I would sincerely hope not!
The denial of any type of works principle in the Mosaic Covenant, as Nichols does, results in confusion concerning the Mosaic Covenant, and even introduces confusion into one's soteriology. Our salvation is not conditioned upon our sanctification, for salvation is all by faith in Christ alone. Sanctification is necessary, but it is not a condition for salvation, but rather a condition from salvation. We are saved, therefore we obey; we are not sanctified in order that we might have "complete salvation," whatever that means.
Nichols, by denying the works principle in the Mosaic Covenant and placing the continuity/ discontinuity line of the Mosaic from the New Covenant on the wrong axis, leads his readers to confusion regarding salvation by faith alone. It is hoped that his expressed soteriology is better than his implicit one from his errant covenant theology.