What is an Unjust Enrichment Claim, and When is it Barred?
Unjust enrichment is not a contract claim at all. It is an equitable claim, a remedy the law supplies precisely when there is no legally-enforceable contract. Simply put, if one party has received and kept a benefit that it would be unfair to walk away with, a court should not let the absence of a signed agreement become an excuse for the unfairness. In these cases, the court steps in and treats the parties as though they had a contract, implying one and requiring payment to set things right.
That equitable basis is also the source of the rule’s most important limit. Because unjust enrichment exists only to fill the gap left when no contract governs, there is no gap to fill when a enforceable contract already exists. Where the parties have made their own bargain, the law enforces that bargain rather than inventing a substitute for it. Courts put this simply: a court will not imply a contract where an express one already governs the same subject matter. If a signed agreement covers the work, that agreement, not an implied one, controls. That distinction is what the twist in this case turns on.
When Does a Written Contract Not Block an Unjust Enrichment Claim?
Suppose your company delivers parts or services to a business, and the invoices go unpaid. The company you dealt with was a subsidiary of a larger corporation, and that parent appears to have benefited from your work. You want to recover from the parent, but a written contract already covers the deal. Can you still pursue an unjust enrichment claim, or does the contract shut the door? A recent federal decision applying Michigan law, DYC Co. v. Tenneco LLC, shows that the answer turns on who signed the contract.
The bar only applies when the express contract is between the same two parties. Where your written contract is with one entity but you are suing a different entity that never signed it, the contract does not block an unjust enrichment claim against that nonparty. Michigan courts have allowed a party who went unpaid to recover from a company that used its work, even though its only contract was with someone else, so long as that company benefited while knowing the work had gone unpaid. A narrow exception runs the other way. When both the plaintiff and the defendant have their own contracts with the same middleman, and those contracts assign payment to the middleman, a court will not imply a contract, because doing so would rewrite a deal the defendant actually made.
What Happened in the Case?
DYC, a Korean parts supplier, sued Tenneco LLC for roughly $1.2 million in unpaid invoices. The scheduling agreements and governing terms showed that the contracting “Buyers” were Tenneco’s subsidiaries and affiliates, not Tenneco LLC itself. Tenneco LLC moved to dismiss on the ground that it never signed the contracts.
The court agreed that Tenneco LLC was not a party, and it dismissed the breach of contract, account stated, and promissory estoppel claims for that reason. It let the unjust enrichment claim proceed. Because Tenneco LLC was not a party to any express contract, no contract barred an implied one, and DYC plausibly alleged that Tenneco LLC benefited from goods delivered to its subsidiaries while knowing DYC went unpaid.
Practical Takeaways:
This decision keeps a path open where a written contract might otherwise seem to foreclose one. When the entity you dealt with cannot or will not pay, a related company that benefited from your work may still be reachable in equity, precisely because it never signed the contract that would block the claim. The reverse is also worth keeping in mind. Separating entities on paper does not guarantee insulation if one of them knowingly enjoys the benefit of unpaid work. The dividing line is whether the party you are suing is bound by an express contract on the same subject. If it is, that contract controls. If it is not, an unjust enrichment claim may still be available.