Is there a duty of the debtor to know and inform its insolvency at the time of contracting?

Abstract

In this paper we question the position that a debtor shall take at the time of contracting with regards to the valuation of its own solvency and, further, if he must alert his creditor in case he concludes that he is in a risky position. Our answer to both questions is negative. A proper understanding of the law must aim for the creditor’s self-protection, where the legal system will scarcely grant him of any useful tool to avoid the loss of the credit, if such measures have not been foreseen and negotiated.