IX. — 2:104 Specific issues of transferability, existence and specification

A security right can be created in a right to performance other than a right to the payment of money, even if this right is not transferable, provided that it can be transformed into a right to the payment of money.

A security right can be created in an asset, even if its owner had agreed not to transfer or to encumber the asset. This rule applies also to a right to performance, whether contractual or not, unless it is non-assignable by virtue of III. — 5:109 (Assignability: rights personal to the creditor) paragraph (1)).

If the parties purport to create a security right in a future, generic or untransferable asset, the security right arises only if and when the asset comes into existence, is specified or becomes transferable. Paragraph (2) remains unaffected.

Paragraph (3) sentence 1 applies with appropriate adaptations to the creation of security rights in a conditional right, including the rights covered by that paragraph. A security right may be created in a present conditional right, especially in the right of a transferee under a conditional transfer of ownership.

Paragraph (3) sentence 1 applies with appropriate adaptations to the creation of security rights for secured rights which are future or only conditional.