In the existing variational inequality formulations for the unconfined seepage problem in porous media, the seepage point, namely the exit point of the free surface, is a singular point and how to locate the seepage point exactly has been an open issue. By generalizing Darcy's law applied solely to the saturated zone in an earth dam to the entire dam including the no-flow zone, a new variational inequality formulation is presented. The new formulation imposes a boundary condition of Signorini's type on the potential seepage boundary and the seepage point turns out to be such a point that makes both inequalities in Signorini's complementary condition become equalities. Singularity of the seepage point is accordingly eliminated. A strategy is developed for overcoming the mesh-dependency in the finite element implementation. (C) 2007 Published by Elsevier Inc.