Historically it replaced suing the other party in a failed engagement for "breach of contract". The idea being that a woman who had a failed engagement was less

Historically it replaced suing the other party in a failed engagement for "breach of contract". The idea being that a woman who had a failed engagement was less able to find a good match. The engagement ring essentially acted as a good behaviour bond that the marriage would go ahead and especially to stop the "I promise I'll marry you, now let's have sex" cad.