ABSTRACT. For piecewise linear approximation of the unilateral Laplace equation (also known as the obstacle problem, and governed by a variational inequality), we prove that the gradient of the error u-u h is of order h. The proof rests on approximation of nonnegative functions U by nonnegative splines V h^U .We are interested in one of the first and most fundamental of the variational problems introduced by Fichera, Stampacchia, andFind that function u in the convex setIf the "obstacle function" xp were absent, this would be the classical Dirichlet problem for Poisson's equation -Au=f, and the condition for a minimum would be a variational equation: a(u,v) = (f,v) for v in 34? J. This is the weak form of Poisson's equation, and coincides with the engineer's "equation of virtual work". For minimization over K instead of the full space 3^J, the variational equation turns into an inequality-just as, for minimization of a function g over O^x^l, the possibility of minima at the endpoints alters the usual dg/dx=0. The condition that u be minimizing is (1) a (u, v -uSuppose we solve this problem approximately, by the Ritz principle: The approximation u h minimizes the functional I over a finite-dimensional AMS (MOS) subject classifications (1970). Primary 35J20, 65N30, 41A15.