In the whole excitement that surrounds a wedding proposal and the subsequent marriage (hopefully!), most people probably do not spend much time considering where the tradition of giving diamond engagment rings came from.
In fact, despite the common misconception that it has been around for centuries, the convention of buying diamonds engagement rings only became a widespread occurence in the middle of the 20th century. While the first recorded occurrence of a diamond solitaire engagement ring being used was in 1477, when Archduke Maximillian of Hambury presented one to Mary of Burgundy, this was more of an exception to the rule then the general custom - although it did set off a trend amongst the royalty of the day.
Bethrothal rings of one kind or another, however, have been around from at least the Roman era. It is during this time that the tradition of placing a band on the third finger of the left hand originated. This was done because the "vena amoris" or vein of love was proported to run direct from this finger to the heart. Accepting the proposal and therefore the ring is observed as a promise to marry and a sign of commitment between the two parties.
But what happens to the ring if one of the couple decides to call the whole thing off? Nowadays, in the UK an engagement ring is seen as an absolute gift and therefore non returnable by the fiancée unless the man can prove that in the giving of the ring, conditions were either expressed or implied that it must be returned if the marriage did not occur. However, if the ring was presented at a time equated with the giving of gifts, such as Christmas, then it automatically remains with the woman. See The Law Society for more information.
In America, the law is slightly more convoluted. In many states, engagement rings are always perceived as conditional gifts and then it is up to the court decided whether those conditions have been adhered to or not. They fall under the categories of no fault, fault and modified rulings.