Throughout its history, the diamond business has been largely selfregulating, operating outside the law of the state. Over the past thirty-five years, the private dispute-resolution mechanisms in the world's diamond bourses, combined with widespread adherence to the secrecy norm, have succeeded in maintaining a largely extralegal contractual regime where transactions are concluded on the basis of the dealers' reputations and the incidence of breach is low.

QUESTION: What happens when this reputation-based system fails, or when new entrants like lab-grown diamonds lack the same reputational constraints?

Lisa Bernestein, Opting out of the Legal Sys…, loc. 278