Here is a wonderfully succinct summary of the proper distinction between Law and Gospel and why it is so essential.

More from the Braunschweig-Woelfenbuettel Church Order…

“The entire doctrine of the divine word, revealed in Holy Scripture, consists in these two distinct chief parts: the doctrine of the law, and the doctrine of the gospel. (When we, however, indicate in the New Testament the law, we mean with Christ [Mt. 22,34-40] and Paul [Rom. 7,12] simply the Ten Commandments, as they are explained in scripture.) And both of these chief parts must remain together in the church of God and be set forth with one another: not just the law without the gospel, and not just the gospel without the law. And yet the two chief parts must be and remain diligently distinguished, that each continue and maintain its particular, proper and distinct office and work, as Paul shows in an excellent and thorough way in II Cor. 3[6], Gal. 3[19ff.], and Rom. 3[19ff.]. That is, the law performs the office and task of preaching and revealing sin, God’s wrath against sin, and damnation and eternal death on account of sin. Thus it is a ministerium, II Cor. 3[6], that is, a means and tool through which God leads us to true, earnest recognition of our sin, Rom. 3[20]. Indeed like a hammer of God, Jer. 23[29], through which He shatters and removes our stone, hard, unrepentant heart and gives us a heart troubled over its sin, II Cor. 7[10], fearful of the wrath of God, troubled and anxious in the face of eternal death and damnation, Rom. 4[15]; Psalm 51[3ff.]; Is. 66[2]; Ez. 36[26f.]. But the gospel has and performs this office: it reveals in Christ the righteousness in which and through which we become free of sin and righteous before God, and acceptable to Him unto eternal life, by grace through faith, without the doing works. And it is a ministerium, means and tool by which God again comforts and raises up slain consciences, gifts, applies and gives forgiveness of sin, righteousness, eternal life, and in summary, gives salvation to all who believe, Rom. 1[16] and 3[22f.]; II Cor. 3[9]. And Paul expresses the distinction briefly in Rom. 3[23f.] and 10[3f.]; Gal. 3[10-14]: The law is a doctrine of our works, which we are to do. The gospel, however, preaches what Christ has done for us, and so that we may receive it with faith.

“This doctrine of the distinction of the law and the gospel will and should thus be accommodated to use: If the preacher has godless, secure people before him, whom he would be pleased to lead and bring to true knowledge of their sin by divine power and working, so that they may see themselves before the wrath of God, death and damnation, and thus through an earnest displeasure, sorrow and regret, turn away from sin, that is, come to repentance, then what he shall present to them from the Word of God, to what he shall direct them so that the Holy Spirit may grant them repentance, that is, give them true knowledge, sorrow and regret over their sin, 2 Tim 2[25f.] is namely not the Gospel, but the Law. For the same is the ministerium of sin and death, II Cor. 3[7;9], through the law comes the knowledge of sin, Rom. 3[20], the law brings wrath, Rom. 4[15], and the law shows even the saints that in this life sin still dwells in their flesh, Rom. 7[5], so that they do not become arrogant, but are kept in humility, and with dear David place their salvation only in this, that their sin has been covered and not reckoned to them, Rom. 4[7f.].

“If, however, one is to comfort a troubled conscience; likewise, if one is to show the people where they may seek, find and obtain the grace of God, reconciliation, forgiveness of sin, and eternal life; one shall not point them to the law, that is, to our works. For the law was not given as if it could make righteous and alive, Rom. 3[19f.]; Gal. 3[10ff.]. Neither does it comfort the conscience, but rather works wrath, Rom. 4[15], is an office not of life, but of death and damnation, II Cor. 3[7;9]. Such consciences shall instead be directed to the doctrine of the gospel of Christ. The same shall be presented to them as a ministerium, means and tool, through which the Holy Spirit will apply, give, and bestow comfort, forgiveness of sins, righteousness and eternal life, through faith, for the sake of Christ.

“Third, if a preacher desires to teach regarding the renewal or new obedience that the Holy Spirit may renew hearts through the word, he must pay very close attention to what word and teaching he uses to that end. The law well shows what we should do, but it does not give the power and the ability. Rather the Holy Spirit must renew the heart, Titus 3[5], and the fruits of the same are all upright, good works Gal. 5[22]; Eph. 5[9]. The Holy Spirit, however, is given and received not through the law, but through the preaching of faith, Gal. 3[2]. Therefore, the person must first become righteous through Christ and acceptable to God, before then the Holy Spirit renews the heart, so that it obtains a good disposition, and in consideration of the great goodness and grace of God desires from the heart to serve and be obedient to God, Rom. 6[17]. And thus when the renewing of the Holy Spirit has begun in the heart, the heart shall not think up special acts of worship [gottesdienste] based on human laws or one’s own devotion, Col. 2[8;23]; Matt. 15[3-9]; Deut. 12[29-31]; Ezek. 20[16]. Rather the law then comes and points out which are those good works God has prepared and in which those who are his should walk, Eph. 2[10]; Ezek. 20[11f.]; Deut. 12[1]; Rom. 12[1f.]; Gal. 5[22f.]. And because the law also quickly shows that even such good works of the saints in this life are weak, impure and imperfect, Psalm 32[6]; Rom. 7[14ff.], the gospel thus comes again and teaches how and why such good works are pleasing and acceptable to God. That is, they are not acceptable because they are pure and perfect, but through faith for the sake of the Lord Christ, because the person of the believer is reconciled and acceptable to God. Such distinctions between the law and the gospel must be diligently maintained. For papaldom is today still a remarkable example for what mischief results in the church when law and gospel are mixed, or separated too far from one another, or their correct use is completely reversed. And therefore it must be reproved that the pope has made out of the law of works a doctrine through which one may obtain forgiveness of sins and eternal life, and conversely, out of the gospel a doctrine of works, indeed, a doctrine which terrifies and does not comfort.

“Neither shall the antinomians or those who assault the law [gesetzstürmer] be tolerated in these churches. They throw the preaching of the law out of the church and would have sin rebuked, and teach sorrow and regret not out of the law, but out of the gospel, under the pretense that consciences should not be so sternly attacked, nor so severely terrorized as happens with the law. But Luther defeated the fanatics on the powerful basis of Holy Scripture. Nor is it true as certain people fanaticize [schwermen] that when the knowledge of sin, sorrow and regret over sin are preached from the law, this is a Judas-repentance and eternal despair. This would be true if one would stop at the preaching of the law alone and not immediately upon repentance present the forgiveness of sins through the gospel. As such it would be a Judas-like despair. But in this case the law would not have been rightly preached. For Christ is the end of the law unto righteousness for those who believe [finis legis est Christus ad iustitiam credenti], Rom. 10:[4]. And through the law God has bound everything under sin, in order that he might have mercy upon all, that the promise might come through faith in Christ, Rom. 11[32]; Gal. 3[22]; and the law is a custodian unto Christ [et lex est paedagogus ad Christum [Gal. 3:24]. Those who reject the third use of the law [tertium usum legis] also do wrongly, as though the law should be of no use to the converted and renewed, in that is reports to them what good works they are to do unto new obedience, as this is explained above.”

Translated by Matthew Harrison and Jacob Corzine; Unpublished.