The Greek word translated "grace" appears over 170 times in the New Testament, yet only a few of those occurrences actually refer to what is commonly thought of as the biblical doctrine of grace. A common meaning of grace (charis) in classical Greek was "loveliness" or "that which is pleasant and attractive." Many are familiar with the “Three Graces,” three beautiful women portrayed in many paintings and sculptures. This seems to be the sense of the Greek word in passages like Luke 4:22 and Colossians 4:6.
Obviously, people like what they find attractive. Thus, charis also has the meaning of "favor" or "approval" in Luke 2:40, 52 and Acts 2:47. When we approve of something or someone, we endow that object of approval with our "good-will," yet another sense of the word (Acts 14:26; 15:40). This good-will may even take the form of an appreciative gift, whether monetary (1 Corinthians 16:3) or non-material (2 Corinthians 1:15). Hence, grace came to mean a gift.
When God is the giver, the gift may be a blessing (2 Corinthians 9:8), a special endowment for service (1 Corinthians 15:10; Romans 1:5; 12:3; 15:15), or even the gift of eternal life (1 Peter 1:13). This gift, above all, is God's love showered upon an undeserving humanity in the form of Jesus the Messiah (John 3:16-17; Ephesians 2:5; Acts 15:11). Thus, the unearned gift of salvation made possible by the death of Jesus is known as “grace” (Romans 3:21-25; 4:4; 11:5-6; Ephesians 1:7-8; 2:5-9; 2 Timothy 1:9; Titus 3:4-7).
In yet an even broader sense, “grace” in scripture becomes a figure of speech, contrasted with "law," that designates the Christian dispensation (Romans 6:14; 1 Peter 5:12; Galatians 2:21). Grace in this sense more or less equals Christianity: You enter into it (Romans 5:2), abide in it (Acts 13:43), or fall from it (Galatians 5:4). The gospel of Christ is synonymous with the gospel of grace (Acts 20:24) because Jesus Christ was the ultimate gift.
Although the actual word for grace appears on the lips of Jesus only twice (Luke 6:32 in the sense of "credit" and Luke 17:9 in the sense of "gratitude"), the concept of God's generous forgiveness shines through parables such as “The Prodigal Son” (Luke 15:11-24), “The Pharisee and the Publican” (Luke 18:9-14), and “The Laborers in the Vineyard” (Matthew 20:1-16). Both Jesus and Paul seek to restore the original teaching of the Old Testament (Deuteronomy 7:7-8; Psalm 103:8-12; Micah 7:18-20) that the rabbis of their day had perverted into an empty legalism. God's election of Israel, his covenant, his steadfast love, and his deliverance from Egyptian and Babylonian captivity were all examples of grace. The Old Testament never suggested that God forgave sin as a reward for sacrifice, quite the contrary (Hosea 6:6; Micah 6:6-8; Amos 5:21-27). Sacrifice was intended only to be a grateful response to God’s grace (Psalm 50:7-15).
Seeing oneself as the unworthy recipient of God's generous gifts should have a direct bearing on one’s ethical behavior. In the “Parable of the Unmerciful Servant” (Matthew 18:21-25), nothing is more despicable than refusing to show mercy after one has been shown mercy. If God's grace does not change our attitude toward others, then we have totally refused to know and imitate God. From beginning to end, the Bible is a book about the free gifts of God. No room is left for human pride, arrogance, presumption, or self-sufficiency because each of those qualities implicitly rejects the notion of humble gratitude.
Paul says in Romans 6:23 that the wages of sin, paid by a check drawn on the devil's account, is death. You earn them. By contrast, the gift of God is eternal life. You neither earn nor deserve it. Because God saves us in spite of our failures, we should love others in spite of theirs. While this doesn't mean we should let them exploit us, it does mean we should always act with their welfare in mind. Being gracious is the epitome of godly behavior (Proverbs 14:31).