Unjust enrichment and promissory estoppel in Michigan
I am Mitchell Bisson, a Grand Rapids civil litigation lawyer. I have litigated for over 15 years. Sometimes there is no signed contract, but one side paid money, relied on a promise, or handed over a benefit. This page covers unjust enrichment and promissory estoppel in Michigan, including what each claim is, mistaken payments, oral promises by a lender, what can be recovered, and filing deadlines. I act for either side, the person making the claim or the person defending it. The short answers below come from my Michigan legal library.
Most of these disputes in Grand Rapids, Kentwood, Wyoming and the rest of Kent County start the same way. Someone did work, paid money or handed over something valuable on a handshake, an email or an understanding, and the deal never made it onto a signed page. Then the money stops, the promise is denied, or the other side keeps what it received. A contractor builds before the change order is signed. A lender or banker says a loan will be extended. A business sends a payment to the wrong account. A family member pays for something on the word of another. The question is whether Michigan law gives a remedy when there is no contract, and the answer depends on which claim fits the facts.
Michigan courts recognize two separate claims for these facts. Unjust enrichment asks whether the defendant received a benefit from you and whether it would be inequitable for the defendant to keep it. Promissory estoppel asks whether the defendant made a promise that the defendant should have expected you to act on, and whether you did act on it, so that the promise has to be enforced to avoid injustice. They are related, but they are not the same claim, and each has limits. Neither claim has its own deadline written into the statutes, so I calendar the shortest period anyone could argue. The general rules on deadlines are in MCL 600.5807, MCL 600.5813 and MCL 600.5815, and I explain how they fit below.
This page is for both sides. I represent people who paid, performed or relied and want it back, and I represent people and companies who are accused of keeping a benefit or breaking a promise. Nothing here predicts how your case will end, and I do not promise outcomes. I will tell you where you stand.
Michigan unjust enrichment and promissory estoppel claims, deadlines and limits
These are the rules in the statutes and the case law. The numbers in your case depend on the facts and the documents.
| Claim or issue | What must be shown | Time limit or key rule | Authority |
|---|---|---|---|
| Unjust enrichment | The defendant received a benefit from the plaintiff, and keeping it is inequitable to the plaintiff | A contract is implied only if no express contract covers the same subject matter | Barber v. SMH (US), Inc., 202 Mich. App. 366, 375 (1993); Morris Pumps v. Centerline Piping, Inc., 273 Mich. App. 187, 194, 196 (2007) |
| Express contract between the same parties | A contract covering the same subject between the plaintiff and the defendant | An implied contract generally cannot be found | Morris Pumps, 273 Mich. App. 187, 194 (2007); Peabody v. DiMeglio, 306 Mich. App. 397, 408 (2014) |
| Contract with someone else, not the defendant | The defendant was not a party to the express contracts | Those contracts do not bar the claim against the defendant | Morris Pumps, 273 Mich. App. 187, 199-200 (2007) |
| Mistaken or excess payment | Money paid that the recipient has no good reason to keep | The recipient can defend by proving detrimental reliance, and the court weighs all the circumstances, including the timing of notice | Michigan Educational Employees Mutual Insurance Co. v. Morris, 460 Mich. 180, 198-200 (1999) |
| Promissory estoppel | A promise that the promisor should reasonably have expected to induce action of a definite and substantial character, and that in fact produced reliance or forbearance, in circumstances where the promise must be enforced to avoid injustice | Applied with caution, only where the facts are unquestionable and the wrong to be prevented undoubted | Novak v. Nationwide Mutual Insurance Co., 235 Mich. App. 675, 686-687 (1999); Marrero v. McDonnell Douglas Capital Corp., 200 Mich. App. 438, 442 (1993) |
| Oral promise by a bank or lender | A promise to lend, extend credit, renew or modify a loan, or waive a loan provision | No action to enforce it unless it is in a writing signed with an authorized signature by the institution, whatever the claim is called | MCL 566.132(2); Crown Technology Park v. D&N Bank, FSB, 242 Mich. App. 538 (2000) |
| Deadline for promissory estoppel | Suit within the period for breach of contract | 6 years | Huhtala v. Travelers Insurance Co., 401 Mich. 118, 125, 132-133 (1977); MCL 600.5807(9) |
| Deadline for unjust enrichment | The statutes do not name this claim; courts borrow a period | The default period for other personal actions is 6 years (MCL 600.5813); one published decision says a purely equitable claim with no legal counterpart is tested by laches instead; calendar the earliest plausible date | MCL 600.5813; MCL 600.5815; Peabody, 306 Mich. App. 397, 408 (2014) |
Why the deadline for unjust enrichment is not settled. Section 5815 says the prescribed period of limitations applies equally whether equitable or legal relief is sought, and the laches doctrine also applies where equitable relief is sought. Section 5813 supplies a 6-year period for other personal actions. In Peabody, the Court of Appeals said a purely equitable unjust enrichment claim that is not covered by any express contract and is not based on an analogous legal claim is not governed by the breach of contract limitations period, and that if it were time-barred, it would be under the equitable doctrine of laches. 306 Mich. App. 397, 408 (2014). In the Supreme Court’s MEEMIC decision, an insurer seeking restitution of overpayments filed within the 6-year period, so any delay in filing was presumptively reasonable and laches did not apply. 460 Mich. 180, 200 (1999). I have not found a Michigan Supreme Court decision that squarely settles which period governs unjust enrichment, so I plan for the earliest date a defendant could argue.
The clock generally starts when the wrong was done. Under MCL 600.5827, a claim accrues when the wrong was done, regardless of when damage results, and the Supreme Court held in Trentadue that the plain language of that statute does not allow a broad common-law discovery rule to postpone accrual. 479 Mich. 378, 388, 407 (2007). How that applies to a given unjust enrichment or promise claim depends on the facts, so I calendar from the earliest date a defendant could argue: the payment, the broken promise, or the day the benefit was received.
What the claimant has to prove
A benefit that came from you. The elements of an unjust enrichment claim are receipt of a benefit by the defendant from the plaintiff and an inequity resulting to the plaintiff because the defendant keeps it. Barber, 202 Mich. App. 366, 375 (1993). The benefit can be money, goods, work, or the use of your property. I ask for the proof: the invoice, the payment record, the delivery receipt, the text asking you to start.
Keeping it has to be unjust. A benefit alone is not enough. In Morris Pumps, the Court of Appeals agreed that not all enrichment is necessarily unjust. 273 Mich. App. 187, 196 (2007). The suppliers there had delivered equipment and materials to a project, the subcontractor that was supposed to pay for them left the job, and the general contractor kept and used the materials without paying. The court noted that a completely innocent retention without knowledge might not be unjust, but it found the general contractor, who oversaw the project and was likely aware the materials had not been paid for, was part of the decision to use them. 273 Mich. App. 187, 196-197 (2007). The suppliers’ express contracts with the subcontractor did not bar their claims against the general contractor, because the general contractor was not a party to those contracts. 273 Mich. App. 187, 199-200 (2007).
No contract on the same subject between the same parties. This is the question I answer first. If the plaintiff and the defendant have an express contract covering the subject, the law will not imply one, and the dispute becomes a question of what the contract says. Morris Pumps, 273 Mich. App. 187, 194 (2007); Peabody, 306 Mich. App. 397, 408 (2014). The court rules allow a party to state as many separate claims as the party has, regardless of consistency and whether they are based on legal or equitable grounds. MCR 2.111(A)(2). I use that when it is genuinely unclear whether an enforceable contract exists. It has limits. Morris Pumps says that when both claims are asserted against the same defendant with whom the plaintiff has an express contract, the existence of the express contract bars the quantum meruit claim. 273 Mich. App. 187, 199 (2007).
A mistaken payment. In MEEMIC, no-fault insurers had paid work loss benefits without deducting social security benefits, and the Supreme Court later held the insurers could deduct them. The Court said it has long recognized the equitable right of restitution when a person has been unjustly enriched at the expense of another, and it sent the cases back for hearings on whether reimbursement was equitable under all the relevant circumstances. 460 Mich. 180, 198-199 (1999). If you sent money to the wrong place, the first things I want are the date you found the error and the date you told the recipient.
A promise that was definite and relied on. In Novak, the Court of Appeals stated the elements of promissory estoppel as a promise, that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, and that in fact produced reliance or forbearance of that nature in circumstances such that the promise must be enforced if injustice is to be avoided. Novak, 235 Mich. App. 675, 686-687 (1999). The court looks objectively at the words and actions around the transaction and at the relationship between the parties, and it applies the doctrine only where the facts are unquestionable and the wrong to be prevented undoubted. 235 Mich. App. 675, 687 (1999). The sine qua non of promissory estoppel is a promise that is definite and clear. Marrero, 200 Mich. App. 438, 442 (1993). The order of events matters too. In Marrero, the employee resigned and moved his family at least six months before the meeting at which the alleged three-year promise was made, so he could not have relied on it, and the only earlier statement, that he “would be taken care of,” was hardly a definite and clear promise. 200 Mich. App. 438, 442-443 (1993).
Defenses and answers I look at in these cases
There is a contract. The first defense I check for is a written agreement between the parties that covers the subject. If one exists, the unjust enrichment claim generally fails, and the real fight is about the contract. The reverse also happens. A plaintiff who relied on a promise sometimes discovers a signed document that says something different. In Novak, an insurance agent claimed an employee of the company told him the at-will provision of his written contract did not apply to him. Even assuming that was said, the signed contract contained an at-will provision and an integration clause that expressly contradicted it, so the court found no objective basis for a clear and definite promise and the promissory estoppel claim was dismissed. 235 Mich. App. 675, 687 (1999).
The statute of frauds. MCL 566.132(1) makes certain promises void unless they are in a signed writing, including an agreement that by its terms is not to be performed within one year and a promise to pay a commission on the sale of an interest in real estate. In Marrero, the Court of Appeals held that an alleged oral three-year employment term fell within the one-year provision, and it separately rejected the promissory estoppel claim for the reasons above. 200 Mich. App. 438, 441-443 (1993).
An oral promise from a lender. Subsection (2) of the same statute is written for financial institutions. It bars an action to enforce a promise to lend money, extend credit, renew or modify a loan, or waive a loan provision unless the promise is in writing and signed with an authorized signature by the institution. MCL 566.132(2). The definition in subsection (4) reaches banks, savings institutions, credit unions and persons licensed under the mortgage brokers, lenders and servicers licensing act or the secondary mortgage loan act, along with their affiliates and subsidiaries. In Crown Technology Park, a borrower said a bank orally promised to waive a prepayment penalty. The Court of Appeals held that the statute bars a claim to enforce such a promise no matter what it is called, rejected promissory estoppel, and also rejected a negligence claim that was at its core an attempt to enforce the same promise. It added that a separate claim that does not rely on enforcing the oral promise is not automatically barred. 242 Mich. App. 538 (2000). If a banker told you something, I look for a signed writing before anything else.
The recipient relied on the money. In a mistaken payment case, a recipient who relied on the payment to his or her detriment can defend against restitution, and the burden of establishing that reliance is on the party opposing the restitution claim. The court also weighs all the relevant circumstances, including the timing of the notices each side gave the other. MEEMIC, 460 Mich. 180, 199-200 (1999). That is why I send a written demand as soon as a payer finds the mistake, and why I ask a recipient early what he or she spent or gave up because of the money.
The deadline. Affirmative defenses have to be stated in the answer, and MCR 2.111(F)(3) lists the statute of limitations, the statute of frauds and estoppel among them. Laches, the equitable doctrine of unreasonable delay, applies in actions seeking equitable relief under MCL 600.5815. I check both defenses before filing or answering.
No benefit, or no unfairness. A defendant may say that nothing was received, that the benefit was already paid for, or that the defendant did nothing inequitable. As Morris Pumps shows, enrichment alone is not enough, and the fight is often over whether keeping the benefit was unjust. I tell you plainly when a defense like this looks strong against you.
Damages, remedies and consequences
Restitution, not everything you lost. In Wright v. Genesee County, the Michigan Supreme Court said a claim for unjust enrichment is neither a tort nor a contract but an independent cause of action, and that its remedy is restitution, not compensatory damages. The Court also noted that a claimant entitled to restitution may obtain a judgment for money in the amount of the defendant’s unjust enrichment. 504 Mich. 410; 934 N.W.2d 805 (2019). The practical point is that the number is what the defendant received and kept, which can be less than what you lost.
Promissory estoppel. I have not found a single controlling rule on the measure of recovery that I can state for every promissory estoppel case, so I work out the realistic range with you from the documents, the promise and what you gave up because of it before we decide whether to file.
When the claim is really about a contract, a taking or a bank
Unjust enrichment versus breach of contract. The same facts can support both, and the answer turns on whether an enforceable agreement covers the subject. A breach of contract claim generally has six years under MCL 600.5807(9). If the contract is enforceable, it controls. If it is not, or if it does not cover the benefit, unjust enrichment may fit. I read the documents first, then plead the claims the facts support, in the alternative where that is permitted.
Unjust enrichment versus conversion. When the dispute is about specific property or specific funds that someone took or kept, a conversion claim may fit better, and it has its own 3-year deadline. Unjust enrichment is a claim for the value of a benefit, and it comes up when there is no specific property to point to, when the defendant did not take anything wrongfully, or when the benefit came from a payment or from work.
How I handle an unjust enrichment or promissory estoppel case
- Find out what is in writing. I start with every document, text and email that mentions the deal, the work or the payment. A signed contract, an invoice or a message can change which claim fits, and a statute of frauds issue can end a promise claim before it starts.
- Build the timeline and the money trail. I put dates on the payment, the promise, the reliance, the demand and the refusal, and I follow the money to see who ended up with it. Those dates drive the deadline.
- Pick the claims that fit. I decide whether the case is breach of contract, unjust enrichment, promissory estoppel, conversion or a mix, and I plead them in the alternative where the rules allow. We decide together whether the claim is worth the cost of litigating before anything is filed.
- Demand or respond. A written demand creates a record of when the other side was told. If you are the one accused, I review the demand against the documents and tell you what is solid and what is not.
- File, serve and answer. A defendant served in Michigan has 21 days to serve and file an answer or take other action the rules allow, and 28 days if service is made outside Michigan or by registered mail. MCR 2.108(A)(1)-(2). The answer states the affirmative defenses under MCR 2.111(F)(3). A missed answer date can lead to a default, so a summons in your hands is something to bring to me the same day.
- Discovery and motions. These cases are often decided on documents. A motion under MCR 2.116 can be based on the statute of limitations under subrule (C)(7), a failure to state a claim under (C)(8), or the lack of any genuine issue of material fact, except as to the amount of damages, under (C)(10). I prepare the record with those motions in mind, whether I am filing one or opposing one.
- Offers of judgment, evaluation and trial. Until 28 days before trial, a party may serve a written offer to stipulate to a judgment under MCR 2.405(B), and the other side has 21 days to accept under MCR 2.405(C)(1). The court may also send the case to case evaluation or mediation under MCR 2.403 or 2.411. If the case does not settle, I am prepared to try it.
Ways an unjust enrichment or promissory estoppel dispute may end without a trial
Whether any of these is available depends on the facts, the documents and the other side. None is automatic.
Repayment or a payment plan. Many mistaken payment disputes end when the money comes back, sometimes in installments. The settlement paper should say the amount, the dates, what happens on a default, and what is released.
A negotiated settlement. The weak points on each side, such as a missing signature, an unclear promise or a limitations question, drive the bargaining. I weigh those pressures honestly for the client I represent, including when they point against my client.
Summary disposition. If the documents answer the question, a judge can decide it on motion under MCR 2.116 without a trial. That can end a claim covered by an express contract, a promise barred by the statute of frauds, or a claim filed too late.
What I need from you
Bring every document that touches the deal: contracts, drafts, proposals, invoices, purchase orders, change orders, receipts, bank and wire records, and the texts and emails that show what was promised and when. Bring a timeline with dates, the names of everyone involved, and anything that shows what you paid, did or gave up because of the promise. If you are the one accused, bring the demand letter or the summons and complaint, and note the date and manner of service, because the answer deadline runs from service. Do not delete messages, do not alter records, do not spend or move disputed funds without talking to me, and do not sign a release, a repayment agreement or an acknowledgment until someone has read it. Talk to the other side about what was said or paid only after you have spoken with me.
Where your Kent County unjust enrichment or promissory estoppel case will be heard
I represent clients in Grand Rapids, Kentwood, Grandville, Wyoming and across Kent County. Under MCL 600.8301(1), the district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000. In Meisner Law Group, the Court of Appeals held that a quantum meruit claim in which the plaintiff sought only money damages, and whose value could not exceed $25,000, belonged in district court under that provision, even though quantum meruit is equitable in nature. 321 Mich. App. 702 (2017). Kent County district courts include the 61st District Court in Grand Rapids, the 59th in Walker and Grandville, the 62A in Wyoming, the 62B in Kentwood and the 63rd for Rockford, Lowell, Cedar Springs, East Grand Rapids and the surrounding townships. Larger claims are filed in the Kent County Circuit Court, the 17th Judicial Circuit. A dispute between businesses, or between a business and its owners, managers, employees, suppliers or similar parties, can qualify as a business or commercial dispute under MCL 600.8031, which defines the cases eligible for a business court docket.
Why people hire me for a Michigan unjust enrichment or promissory estoppel matter
You work directly with me, the lawyer handling your case. I give you the strengths and weaknesses of the case straight, including what it could cost you and what it could recover. I build the case the facts support, and then we decide together how to proceed.
Fees depend on the type of case, its complexity and whether it is likely to go to trial. I explain my fee arrangement at the consultation, before you decide whether to hire me.
Questions I hear from people with an unjust enrichment or promissory estoppel claim in Michigan
How long do I have to sue for unjust enrichment or promissory estoppel in Michigan?
Michigan has no statute that names either claim, so courts borrow a period. For promissory estoppel, the Michigan Supreme Court applied the six-year contract period in Huhtala v Travelers. Courts also commonly use six years for unjust enrichment (MCL 600.5807(9), 600.5813), but one published Court of Appeals decision treats a purely equitable claim with no legal counterpart as subject to laches instead, and the Supreme Court has not squarely settled the point. Calendar the shortest period a defendant could argue.
I paid someone too much, or sent money to the wrong person by mistake. Can I get it back?
Often, through an unjust enrichment claim. The Michigan Supreme Court has long recognized an equitable right of restitution when a person has been unjustly enriched at another’s expense (MEEMIC v Morris). The recipient can defend by proving he or she relied on the payment to his or her detriment, and the court weighs all the circumstances, including how quickly you gave notice of the mistake.
A banker told me orally that the bank would extend or modify my business loan. Can I enforce that promise or sue for promissory estoppel?
Generally no. MCL 566.132(2) bars an action against a financial institution to enforce a promise to lend, extend credit, renew or modify a loan, or waive a loan provision unless the promise is in writing and signed with an authorized signature by the institution. In Crown Technology Park v D&N Bank, the Court of Appeals held the bar applies whatever the claim is called, including promissory estoppel.
If I win an unjust enrichment claim, what can I recover?
Restitution, not compensation for everything you lost. In Wright v Genesee County, the Michigan Supreme Court explained that unjust enrichment is neither a tort nor a contract claim, and that its remedy is restitution that corrects a defendant’s unjust retention of a benefit. A court can award money in the amount of the defendant’s unjust enrichment. Because the court weighs the circumstances, a recipient who relied on the benefit can reduce or defeat recovery.
What is unjust enrichment, and can I use it if there is no contract?
Unjust enrichment requires two things: the defendant received a benefit from you, and keeping it without paying would be inequitable. The Court of Appeals stated these elements in Morris Pumps v Centerline Piping. A court implies a contract only when no express contract covers the same subject matter between the same parties.
What is promissory estoppel, and when does it work in Michigan?
Promissory estoppel requires a promise that the promisor should reasonably expect to induce action of a definite and substantial character, and that in fact produced reliance or forbearance such that the promise must be enforced to avoid injustice. Courts apply it with caution. Novak v Nationwide rejected the claim where the alleged oral promise contradicted a signed contract with an integration clause.
Related Michigan pages
- Grand Rapids Civil Litigation Attorney
- Grand Rapids Breach of Contract Attorney
- Grand Rapids Conversion Claim Attorney
- Contract damages and remedies
- Commercial contracts and UCC disputes
- Kent County business court
I handle unjust enrichment and promissory estoppel claims and defenses in Michigan. Contact me 24/7 by phone or email. Your Rights, My Fight! Call for a free initial consultation.
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Law Offices of Mitchell S. Bisson, 2828 Kraft Ave SE, Suite 295, Grand Rapids, MI 49512, serving Kent County and West Michigan.
This page provides general information about Michigan law and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Consult a licensed attorney about your specific situation.