C. Samuel Storms in The Grandeur of God:
The first and possibly most fundamental characteristic of divine grace is that it presupposes sin and guilt. Grace has meaning only when men are seen as fallen, unworthy of salvation, and liable to eternal wrath… Grace does not contemplate sinners merely as undeserving but as ill-deserving… It is not simply that we do not deserve grace; we do deserve hell.
Grace is commonly understood to be God’s unmerited favor. There is, however, more to this term.
The Biblical Use of the Term “Grace.” The word “grace” is not always used in the same sense in Scripture, but has a variety of meanings. In the Old Testament we have the word chen (adj. chanun), from the root chanan. The noun may denote gracefulness or beauty, Prov. 22:11; 31:30, but most generally means favour or good-will. The Old Testament repeatedly speaks of finding favour in the eyes of God or of man. The favour so found carries with it the bestowal of favours or blessings. This means that grace is not an abstract quality, but is an active, working principle, manifesting itself in beneficent acts, Gen. 6:8; 19:19; 33:15; Ex. 33:12; 34:9; I Sam 1:18; 27:5; Esth. 2:7. The fundamental idea is, that the blessings graciously bestowed are freely given, and not in consideration of any claim or merit. The New Testament word charis, from chairein, “to rejoice,” denotes first of all a pleasant external appearance, “loveliness,” “agreeableness,” “acceptableness,” and has some such meaning in Luke 4:22; Col. 4:6. A more prominent meaning of the word, however, is favour or good-will, Luke 1:30; 2:40, 52; Acts 2:47; 7:46; 24:27; 25:9. It may denote the kindness of beneficence of our Lord, II Cor. 8:9, or the favour manifested or bestowed by God, II Cor. 9:8 (referring to material blessings); I Pet. 5:10. Furthermore, the word is expressive of the emotion awakened in the heart of the recipient of such favour, and thus acquires the meaning “gratitude” or “thankfulness,” Luke 4:22; I Cor. 10:30; 15:57; II Cor. 2:14; 8:16; I Tim. 1:12. In most of the passages, however, in which the word charis is used in the New Testament, it signifies the unmerited operation of God in the heart of man, affected through the agency of the Holy Spirit. While we sometimes speak of grace as an inherent quality, it is in reality the active communication of divine blessings by the inworking of the Holy Spirit, out of the fulness of Him who is “full of grace and truth,” Rom. 3:24; 5:2, 15; 17:20; 6:1; I Cor. 1:4; II Cor. 6:1; 8:9; Eph. 1:7; 2:5, 8; 3:7; I Pet. 3:7; 5:12. – Louis Berkhof, Systematic Theology (Grand Rapids, 1949), pp. 426-27.
“We have to be on our guard against the supposition that grace is an abstract quality; it is an active personal principle, showing itself in our dealings with those by whom we are surrounded. … In the great proportion of passages in which the word grace is found in the New Testament, it signifies the unmerited operation of God in the heart of man, effected through the agency of the Holy Spirit. We have gradually come to speak of grace as an inherent quality in man, just as we talk of gifts; whereas it is in reality the communication of Divine goodness by the inworking of the Spirit, and through the medium of Him who is ‘full of grace and truth.’” — Robert Girdlestone, Synonyms of the Old Testament (London: Longmans, Green and Co., 1871), p. 179.
1.) The True Meaning of Grace By Wayne Jackson
2.) How Grace Works (Titus 2:11-14) – Bible.org
3.) What Does it Mean to be “Saved by Grace”? By Lorraine Day, M.D.
4.) Law and Grace: Discerning God’s Expectations for Christians by C. David Ragland, Jr.