Although the term “Covenant of Works” is not a biblical designation, and although the word “covenant” is not used to describe God's relationship with Adam in the Garden, there are several reasons for believing that the idea is eminently biblical, even if the precise term is not. First, creation itself is portrayed in the scriptures as existing in a covenantal relationship with God (Jeremiah 33:20-26); and if creation in general is established in covenant with God, how much more must the climactic figure of creation, the man created in God's own image, necessarily be in covenant with God from his very creation? Second, the account of man's creation in Genesis very clearly displays all the elements that characterize later covenants: first, a preamble emphasizing the greatness of God as seen in his prior works (1:1-27; 2:5-9); second, particular stipulations placed upon those with whom God is entering into relationship (1:28; 2:15-17); third, the negative sanction of death, in the case of disobedience (2:18); which gives warrant for understanding, fourth, an implied positive sanction of eternal life for obedience (analysis above taken largely from Peter Golding, Covenant Theology, Mentor 2008, p. 118). Third, the creation account provides a description of what appears to be functioning as a covenant sign, or sacrament, in the Tree of Life. Fourth, the most likely translation of Hosea 6:7, “They like Adam have transgressed the covenant,” gives a definite indication that a covenant was made with Adam at the time of his creation. Fifth, and most importantly, the language and teaching of Romans 5:12-21 demands an understanding of Adam as our federal head, or covenant representative. In this passage, which is monumentally important for Covenant Theology, Adam is depicted as our first federal head, whose failure rendered us all guilty before God; but in contrast to Adam, Christ, our second federal head, rendered to God a perfect righteousness, and his success established us as righteous before God. If, therefore, Christ was accomplishing our salvation as a federal champion in the Covenant of Grace, whose terms he fulfilled for us; then this passage indisputably casts Adam in the same role, that is, as our federal head undertaking (but failing) to fulfill the terms of a covenant for us. Hence, his failure in the Garden was manifestly a transgression of a covenant; and this covenant has long been called the Covenant of Works.
Some theologians believe that the term “Covenant of Works” detracts from the personal and favorable relationship that first existed between God and man, and de-emphasizes the unmerited benevolence and kindness of God toward men from the beginning of creation; and so, certain other terms have been suggested instead of “Covenant of Works,” including, “Covenant of Nature,” “Covenant of Life,” “Covenant of Creation,” and “Covenant of Eden”.
Monergism Q & A