Pocket money rule (§ 110 BGB)

In short: A minor’s contract is valid from the start if the minor pays for it immediately with money the parents have given for that purpose or for free use (pocket money).

In more detail: The pocket money rule (§ 110 BGB) covers everyday purchases: ice cream, games, small electronics. What matters is that the price is paid immediately and in full. Instalment purchases, subscriptions and contracts with later payment are not covered, because the child commits to something in the future.

In detail

• Free use: children generally decide what to spend pocket money on, unless the parents explicitly forbid it.
• Earmarked: if money is given for a specific goal (e.g. school supplies), it may only be used for that.
• No instalments: purchases on invoice, instalment plans and ongoing contracts (phone plan, streaming subscription) need the parents’ consent.
• Not enough for a business: someone who buys stock, writes invoices and has customers is no longer acting with pocket money alone. That needs authorisation under § 112 BGB.

See also: Legal capacity of minors, Parental consent (§ 107 BGB)