In order to understand contractual relations in the diamond industry, it is important to briefly consider why executory agreements-contracts-are used at all. For many transactions, simultaneous exchange is advantageous. It reduces the riskiness of the transaction, decreases transaction costs by eliminating costly and time consuming negotiations over payment terms, eliminates the need for going through the formalities of cachet, and, most important, enables dealers to trade with people about whose reputation they have little information.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 112