Educational modifications mandated during COVID-19; Breach of contract; Tuition & fees; Allen v Michigan State Univ; Implied contracts; Room & board refunds; “Illusory” contract; Unjust enrichment

The court held that plaintiffs-students failed to establish implied contracts for exclusively in-person instruction or particular campus services, that the housing contracts were not breached or illusory, and that unjust enrichment was not shown. They sued when defendant-university (U of M) moved classes online during COVID-19. The Court of Claims granted summary disposition for defendant. On appeal, the court first held that nothing “about the course catalog or U of M’s historical conduct suggested an assent . . . to provide live, in-person instruction under any and all possible circumstances.” In addition, the Fee Schedule “showed that the fees at issue were mandatory and associated with enrollment, not with any exchange of services.” Moreover, the fees were paid “regardless of whether plaintiffs utilized the associated services.” And they “were used during the 2020 Winter Semester to support ongoing university operations, which remained available to students throughout the entire semester.” The availability of a withdrawal-period refund did not convert enrollment fees into service fees. Even assuming an implied contract, no breach was shown because U of M used the fees to support ongoing operations during the semester. It was clear “‘there was no offer—and thus no meeting of the minds—on any specific format for delivering education and services,’” and thus, no enforceable contractual promise. As to housing, “U of M encouraged its students to leave but explicitly allowed them to remain and for their needs, including food, housing, and health services, to be met.” It also “offered a $1,200 refund for those students who chose to move out. Both plaintiffs took the $1,200 refund in exchange for voluntarily moving out of campus housing.” The parties agreed on “price, early termination, and refunds, and it is undisputed that plaintiffs never availed themselves of these terms. Instead, [they] chose to voluntarily leave and take a $1,200 refund, but the terms of the contract they agreed to still made them responsible for the remainder of their housing costs.” As to the illusory-contract argument, the court found plaintiffs “failed to show any promise that U of M did not perform.” While they sought “a prorated refund for time spent away from student housing, they point[ed] to no contractual language that would grant them the relief they seek.” Finally, as to unjust enrichment, the court noted that “U of M moved live, in-person courses to online learning and cancelled campus events . . . due to the unexpected COVID-19 pandemic. Even in the face of a devastating public health crisis, [it] ‘successfully maintained the core of its educational mission— providing instruction and various services for students—throughout the pandemic.’” It was not unjust, under the circumstances, for it to retain the tuition and fees paid by plaintiffs. Affirmed.