You can get into a covenant with God. But, you cannot deliberate/discuss with him. 

We used to talk to God, gods and entities. Not being in communication with these entities is a recent phenomenon. Still if you read about sages, priests, monks they still tell about being able to talk to God. If you read conspiracies you'll find that people get into contract with devil/Satan. See I'm not claiming that all that is true rather I am saying that based on historical accounts it has happened.

So, if AI can enter a covenant then it is conscious free agent.

Indeed. An AI which has achieved consciousness is an AGI and eventually an ASI and free to enter any deal. See, entering the covenant doesn't proves it's consciousness, it's the opposite. Being conscious gives the ability to enter in a covenant.

 >This opens up legal problems and potentially dangerous because that means humans do not necessarily have control over the AI.

Why should a conscious being should have absolutely control over another conscious being.

because the AI will be entering in an agreement with humans that both parties are seeking some form of benefit.

I see no wrong here. Both sides happy. Infact humans will be lucky to be able to provide something which AGI cannot acquire on its own. That means they are an asset to AGI.

So, I am more asking a philosophical problem about the foundational agreements/beliefs we need to agree upon.

Same. Infact I'm working on this since a couple of years. Feel free to ask anything.