MARKMAN, J.

Defendants, an unlicensed residential builder; his businesses; and Denaglen Corp., a check-cashing service, seek leave to appeal the decision of the Court of Appeals denying them relief from summary disposition. The trial court entered judgment in favor of plaintiffs, a married couple and parties to a home restoration contract with the unlicensed builder defendant and his businesses, and the Court of Appeals affirmed. We directed that oral arguments be held to address whether to grant the application for leave to appeal or take other action pursuant to MCR 7.302(H)(1). Epps v. 4 Quarters Restoration, LLC, 496 Mich. 853, 846 N.W.2d 928 (2014). After hearing arguments on March 10, 2015, defendants' application is now considered. This case raises four issues: (1) whether MCL 339.2412(1), which prohibits an unlicensed builder from "bring[ing] or maintain[ing] an action . . . for the collection of compensation" prevents an unlicensed builder from defending on the merits against claims asserted against him by a homeowner; (2) whether MCL 339.2412(1) provides a homeowner with an independent cause of action for damages arising from the statute's violation; (3) whether a contract for the services of an unlicensed builder is void ab initio or whether it may have some form of continuing legal existence; and (4) whether the trial court abused its discretion in refusing to set aside the default of defendant Denaglen Corp., the check-cashing service. In lieu of granting leave to appeal, we affirm in part and reverse in part the judgment of the Court of Appeals and remand to the trial court for further proceedings consistent with this opinion.

I. FACTS AND HISTORY

Plaintiffs Danny and Joyce Epps own a home in Detroit. On July 26, 2006, that home was damaged in a flood. Plaintiffs' home insurance provider, Auto Owners Insurance Company, employed AM Adjusting for the purpose of referring plaintiffs to professionals capable of performing the necessary restoration work. AM Adjusting referred plaintiffs to defendant Troy Willis and his companies, 4 Quarters Restoration and Emergency Insurance Services. Willis met with plaintiffs and showed them a book depicting some of his work. The book also displayed a copy of Willis's residential builder's license, although Willis neglected to inform plaintiffs that the license had been revoked on January 31, 2006.

Plaintiffs subsequently decided to hire Willis to perform restoration services on their home and on personal property damaged in the flood, and the parties signed a misnamed "Fire Repair Agreement" to that effect on July 26, 2006.1 That agreement states that plaintiffs:

An addendum, titled "Work Authorization,"3 states in relevant part:

Another addendum, titled "Insurance Power of Attorney,"5 was signed by plaintiffs and contained the following language:

Their Agents

Defendant Willis began work on plaintiffs' home, and also began making insurance claims through plaintiffs' homeowners' policy. Plaintiffs were aware that Willis was filing claims on their behalf, although they assert they were unaware of the amounts of these claims. Upon approving the claims, Auto Owners sent checks directly to Willis. Sometimes these checks listed both Willis and the plaintiffs as payees, and at other times only the plaintiffs were listed as payees. When Willis received the checks, he indorsed them himself, signing plaintiffs' names. In total, Willis received and indorsed checks from Auto Owners equaling $128,047. Upon receiving and endorsing the checks, he then cashed these at defendant Denaglen's check-cashing business, MBM Check Cashing.7 Denaglen charged Willis a 3% fee for providing its services. After Willis had indorsed the checks to Denaglen, the latter deposited the funds into its account at Comerica Bank. By the end of 2006, Willis had apparently discontinued work on plaintiffs' home. The parties dispute both whether the restoration had been completed and whether the work had been performed in a satisfactory manner.

On July 24, 2009, plaintiffs filed the present action in the Wayne Circuit Court against all the individuals and businesses involved in either the restoration of their home or with the flow of monies associated with the project, including Willis and his businesses, Denaglen Corporation, Comerica Bank, Auto Owners Insurance, and AM Adjusting. Comerica Bank filed an interpleader action and deposited $128,047 from Denaglen's account into escrow and the claims against Comerica were dismissed. Auto Owners Insurance assigned to plaintiffs any claims it had against the other named defendants and the claims against it were also dismissed, as were the claims against AM Adjusting.

As to Willis and his businesses, plaintiffs alleged that these parties performed restoration services on plaintiffs' home absent the requisite license and therefore were not entitled to receive compensation for their services. Plaintiffs sought to have the agreement between them and Willis declared "illegal, void and unenforceable" and thereby rescinded. Plaintiffs further alleged that Willis defrauded them, carried out their restoration in an unworkmanlike manner, and converted the proceeds of their insurance checks. Regarding the latter claim, plaintiffs sought treble damages measured by the face value of the insurance checks.

With regard to Denaglen, plaintiffs alleged that it wrongfully cashed the insurance checks, acted in bad faith and without employing reasonable commercial standards, and converted the funds paid by Auto Owners to plaintiffs. As a result, plaintiffs sought the $128,047 placed into escrow by Comerica. Denaglen failed to file a timely answer to plaintiffs' complaint and a default judgment against it was entered. Denaglen subsequently moved to have the default set aside, but the trial court denied the motion.

The parties filed competing motions for summary disposition. The trial court granted plaintiffs' motion and denied defendants' motion, ordering that the escrow funds be awarded to plaintiffs. The court explained its ruling by stating, "MCL 339.2412(1) is applicable in this case and Plaintiffs are entitled to summary disposition as a matter of law." The trial court finally held that defendants were liable as a matter of law for converting the insurance checks issued by Auto Owners.

Defendants appealed, and the Court of Appeals affirmed albeit on different grounds. The Court of Appeals disagreed with the trial court that MCL 339.2412(1) mandated judgment in plaintiffs' favor, noting that MCL 339.2412(1) states only that an unlicensed builder may not "`bring or maintain an action . . . for the collection of compensation. . . .'" Epps v. 4 Quarters Restoration, LLC, unpublished opinion per curiam of the Court of Appeals, issued June 6, 2013 (Docket No. 305731), p. 4 2013 WL 2460119. Because defendants did not "bring or maintain an action," but sought only to defend against plaintiffs' action, MCL 339.2412(1) did not impose liability on defendants. Id. The Court also held that the statute did not afford plaintiffs a private cause of action to seek damages for its violation, but rather that a homeowner aggrieved by a builder's unlicensed work was obligated to seek damages under traditional common-law contract and tort theories. Id. at 5-6.

The Court of Appeals nonetheless affirmed summary disposition in favor of plaintiffs because it believed that defendants had converted the proceeds of the insurance checks. The court noted that Willis had misrepresented himself to plaintiffs as a licensed builder and held that "Willis's fraud rendered the power of attorney entered by the [plaintiffs] void ab initio." Id. at 6. Accordingly, it concluded that "Willis therefore had no authority to endorse and negotiate checks issued by the insurance company on the [plaintiffs'] behalves." Id. The court agreed with the trial court that the proper measure of damages for the conversion was the face value of the converted instruments and affirmed the lower court's order distributing the funds held in escrow to plaintiffs.

Defendants sought leave to appeal in this Court, contending that the Court of Appeals erred by finding defendants liable for conversion as a matter of law and also that the trial court abused its discretion when it failed to set aside Denaglen's default. Plaintiffs filed a cross-appeal, conditioned upon this Court granting defendants' application for leave, contending that the Court of Appeals erred when it held both that MCL 339.2412(1) did not provide plaintiffs with a private cause of action to recover the funds paid to Willis and that Willis was entitled under the statute to defend himself against plaintiffs' claims.

II. STANDARD OF REVIEW

This case involves matters of statutory and contract interpretation, which are reviewed de novo. Sands Appliance Servs. v. Wilson, 463 Mich. 231, 238, 615 N.W.2d 241 (2000). A trial court's ruling on a motion for summary disposition is also reviewed de novo. Costa v. Community Emergency Med. Servs., Inc., 475 Mich. 403, 416, 716 N.W.2d 236 (2006). A trial court's decision regarding a motion to set aside a default judgment is reviewed for an abuse of discretion. Lawrence M. Clarke, Inc. v. Richco Constr., Inc., 489 Mich. 265, 272, 803 N.W.2d 151 (2011). An abuse of discretion occurs when the court's decision results in an outcome that falls outside the range of principled outcomes. Barnett v. Hidalgo, 478 Mich. 151, 158, 732 N.W.2d 472 (2007).

III. ANALYSIS

A. ABILITY TO DEFEND

The trial court granted summary disposition in favor of plaintiffs because it believed that MCL 339.2412(1) mandated that result. The Court of Appeals disagreed, holding that the statute does not apply because it only operates to prevent an unlicensed builder from "bring [ing] or maintain[ing]" claims against a homeowner. The statute does not, however, prevent an unlicensed builder from defending itself against a claim on its merits. Because it was the homeowners bringing claims against the builder in the instant case, MCL 339.2412(1) is inapplicable. We agree with that analysis.

MCL 339.2412(1) states:

"The primary goal of statutory interpretation is `to ascertain the legislative intent that may be reasonably inferred from the words expressed in the statute.'" Allison v. AEW Capital Mgt., LLP, 481 Mich. 419, 427, 751 N.W.2d 8 (2008), quoting GC Timmis & Co. v. Guardian Alarm Co., 468 Mich. 416, 420, 662 N.W.2d 710 (2003). When the language of a statute is clear, it is presumed that the Legislature intended the meaning expressed therein. Allison, 481 Mich. at 427, 751 N.W.2d 8. If a statute does not define a word, it is appropriate to consult dictionary definitions to determine the plain and ordinary meaning of the word. Id., citing Koontz v. Ameritech Servs., Inc., 466 Mich. 304, 312, 645 N.W.2d 34 (2002). Legal terms, however, are to be construed according to their "peculiar and appropriate meaning in the law." MCL 8.3a.

MCL 339.2412(1) prohibits an unlicensed builder from "bring[ing] or maintain[ing] an action . . . for the collection of compensation. . . ." The Court of Appeals was correct in holding the statute inapplicable here; it does not bar the compensation itself, but only an "action" to collect it. An "action" is defined as "a lawsuit brought in court; a formal complaint within the jurisdiction of a court of law." Black's Law Dictionary (6th ed.). "Cause of action" is similarly defined as, "[t]he fact or facts which give a person a right to judicial redress or relief against another. . . . A situation or state of facts which would entitle a party to sustain action and give him right to seek a judicial remedy in his behalf." Id. A party may assert a cause of action by filing a "complaint, cross-claim, counterclaim, or third-party claim. . . ." MCR 2.111(F)(2).

By contrast, a "defense" is "[t]hat which is offered and alleged by the party proceeded against in an action or suit, as a reason in law or fact why the plaintiff should not recover or establish what he seeks; [t]hat which is put forward to diminish plaintiff's cause of action or to defeat recovery." Black's Law Dictionary (6th ed.). It is not an action, such as a complaint, cross-claim, counterclaim, or third-party claim, but rather an assertion made in response to an action. Therefore, a party may bring an "action" seeking compensation by filing a complaint and the adverse party may then assert a "defense" as a reason why the complainant should not recover what he or she seeks or otherwise prevail in the action. An "action" and a "defense" are separate assertions and are essentially a call and a response, the assertion of the former preceding and triggering the latter. A party bringing an "action" seeks to recover from the opposing party, while a party asserting a "defense" seeks to "diminish" or "defeat" that action.

In the context of litigation involving an unlicensed builder, MCL 339.2412(1) bars an unlicensed builder from seeking compensation by pursuing a complaint, cross-claim, counterclaim, or third-party claim against a homeowner. In these circumstances, the unlicensed builder would be asking the court to order the homeowner to pay some amount allegedly due. However, if it is the homeowner who seeks compensation or performance from the unlicensed builder, the homeowner has brought the "action." And if the builder offers reasons why the homeowner should not recover in its action, the builder has asserted a "defense" and the assertion of a defense is not barred by MCL 339.2412(1).

Further supporting the conclusion that MCL 339.2412(1) does not impair an unlicensed builder's ability to defend himself or herself from litigation, the statute forbids actions for the "collection of compensation[.]" The American Heritage Dictionary of the English Language (New College ed., 1981) defines "collect" as "to call for and obtain payment of." When an unlicensed builder defends against an action by a homeowner to recover sums paid, the builder does not seek to "collect" compensation; rather, the builder presumably seeks to retain compensation already possessed. Any other interpretation would mean that a defendant in a lawsuit who asserts a successful defense has somehow "collected" from the plaintiff. While it is true that in many cases, as here, the unlicensed builder may have previously collected some amount of payment from the homeowner, MCL 339.2412(1) only prohibits actions "in a court of this state" for the collection of compensation. Any collection of payment that occurred before the litigation was not accomplished by an "action in a court" and therefore does not come within the scope of MCL 339.2412(1).

We also concur with the Court of Appeals in Parker v. McQuade Plumbing & Heating, Inc., 124 Mich.App. 469, 471, 335 N.W.2d 7 (1983), in which the following was said of MCL 339.2412(1): "The statute removes an unlicensed contractor's power to sue, not the power to defend, [and] was intended to protect the public as a shield, not a sword." This, we believe, constitutes the most reasonable interpretation of the statute, and when a statute is plain and unambiguous, it must be applied as written and without judicial gloss. Wayne Co. v. Hathcock, 471 Mich. 445, 456, 684 N.W.2d 765 (2004). MCL 339.2412(1) operates as a bar to actions, not a bar to defenses. It prevents an unlicensed builder from attempting to "collect" payment from a homeowner through the filing of "actions" in a court of law. It does not, however, prevent an unlicensed builder from seeking to "diminish" or "defeat" actions filed against the builder by arguing that the claimant has not been damaged by the builder to the extent alleged.8

B. PRIVATE CAUSE OF ACTION

The Court of Appeals concluded that MCL 339.2412(1) does not give rise to a private cause of action that a homeowner may bring against an unlicensed builder. Plaintiffs argue that the statute should be interpreted to allow a homeowner to bring a private cause of action seeking the disgorgement of monies paid to an unlicensed builder. We agree, however, with the analysis of the Court of Appeals that MCL 339.2412(1) does not afford a homeowner a separate and independent right to demand that an unlicensed builder return funds paid for work conducted when the builder lacked the requisite license.

MCL 339.2412(1) clearly does not create an express private cause of action, given that by its terms it only purports to preclude certain actions by an unlicensed builder. Nonetheless, it is sometimes possible that a court can infer a private cause of action from a statute when necessary to remediate its breach. Such an inference is appropriate when the statute provides no express remedy for its violation, yet it is deemed, exclusively or in part,

We find no basis here for inferring a private cause of action to enforce MCL 339.2412(1). Clearly, the statute was written to protect homeowners, such as plaintiffs in this case, by imposing a burden on a builder who in the Legislature's view would endanger the public safety by performing construction work without a license. However, a homeowner is protected from the harm that may result from the performance of unlicensed work—i.e., the provision of unsatisfactory or unsafe building services—through existing and traditional common-law causes of action in tort and contract. Therefore, even if MCL 339.2412(1) did not exist, an unlicensed builder could be held liable for the consequences of poorly performed construction work.

Furthermore, MCL 339.2412 expressly provides a mechanism for its enforcement, apart from civil liability:

By expressly conferring enforcement authority only on prosecutors and the Attorney General, the statute would seem by implication not to confer similar authority on a private party.9 MCL 339.2412(1) was written, as its terms make reasonably clear, to impose a burden on an unlicensed builder, not—except indirectly by its restriction of lawsuits by the builder against the homeowner—to afford a benefit to a homeowner.

In summary, (a) MCL 339.2412(1) prevents an unlicensed builder from bringing "actions," i.e., claims, counterclaims, cross-claims, and third-party claims, to collect compensation for services performed in violation of our state's licensing requirements; (b) MCL 339.2412(1) does not, however, prevent an unlicensed builder from defending on the merits against an action brought by a homeowner seeking to recover sums already paid to the builder;10 and (c) MCL 339.2412(1) does not create a private cause of action allowing a homeowner to bring claims against an unlicensed builder. The statute has but one purpose—to prevent an unlicensed builder from "bring[ing] or maintain[ing] . . . action[s]. . . for the collection of compensation. . . ."

C. STATUS OF CONTRACT

We must next assess the legal character of the purported contract between plaintiffs and Willis.11 Plaintiffs argue that the restoration contract was illegal and therefore void ab initio because it contemplated the performance of an illegal act—the provision of construction services by an unlicensed builder in violation of MCL 339.601.12 Plaintiffs thereby argue that the contract, in effect, never came into existence and was a nullity from the outset and thus could not confer rights or obligations on either of the parties.13 Defendants disagree and argue that the contract was merely voidable at the option of plaintiffs. If that were the case, the contract would be valid and enforceable unless and until plaintiffs themselves exercised their option to rescind it.14

The legal status of the instant contract—implicating the distinction between a "void" contract, a "voidable" contract, and a valid and enforceable contract—is crucial in resolving the underlying dispute because it determines whether the Court of Appeals correctly held that, as a matter of law, defendants here converted the insurance checks drawn by Auto Owners. "Void" is defined as: "[n]ull; ineffectual; nugatory; having no legal force or binding effect. . . ." Black's Law Dictionary (6th ed.). "Void contract" is similarly defined as: "[a] contract that does not exist at law; a contract having no legal force or binding effect. . . . [S]uch contract creates no legal rights and either party thereto may ignore it at his pleasure, insofar as it is executory." Id. In contrast, "voidable" is defined as: "[t]hat which may be avoided, or declared void; not absolutely void, or void in itself[,]" while a "voidable contract" is defined as: "[a] contract that is valid, but which may be legally voided at the option of one of the parties. . . . One which can be avoided (cancelled) by one party because a right of rescission exists as a result of some defect or illegality (e.g., fraud or incompetence)." Id. Finally, a valid and enforceable contract is, of course, simply a contract lacking any inherent flaws that would impair a party's ability to enforce it.

Plaintiffs argue, and the Court of Appeals held,15 that the instant contract was void ab initio. Because the contract was a nullity from the outset, it could not as a matter of law grant any authority to Willis. Consequently, the Court of Appeals held that summary disposition in favor of plaintiffs on their conversion claim was appropriate. Because of this, it was unnecessary for the Court of Appeals to assess plaintiffs' fraud and breach of contract claims against Willis.

If plaintiffs and the Court of Appeals are correct that the instant contract is void ab initio, then it could not as a matter of law have given Willis the right to receive, indorse, and cash the insurance checks because defendants contend that Willis possessed that authority pursuant to the contract's assignment and "power of attorney" addendums. According to defendants, because Willis's alleged fraud rendered the contract at most voidable, and because it is undisputed that plaintiffs never sought to rescind the contract before Willis performed his services, at the time he indorsed and cashed the checks, he possessed the authority to do so. If the contract is not void ab initio, then at least some question is raised as to whether the actual terms of the contract conferred on Willis the authority to receive, indorse, and cash the insurance checks on his own and without plaintiffs' knowledge.

In determining that the instant contract was void ab initio, the Court of Appeals not unreasonably cited past decisions of this Court stating as much. Unfortunately, the proper disposition of this issue—whether a restoration contract such as in this case was void, voidable, or lawful and valid under Michigan law—remains unclear. Courts in Michigan, as well as throughout the country, have treated contracts involving an unlicensed builder in a disparate and inconsistent fashion.16 Furthermore, although the courts of this state have often pronounced contracts involving an unlicensed builder to be "void," it appears that in many instances, courts have stated that particular types of contracts are "void" without employing that term in its actual sense.17 So while a court may pronounce a contract "void," it may nonetheless have treated the contract as possessing some form of legal existence and import.

It is not altogether surprising that a lack of clarity has arisen surrounding the legal status of these particular kinds of contracts. In a typical dispute involving an unlicensed builder, the builder is attempting to enforce the contract against the homeowner and to recover compensation.18 However, because the unlicensed builder is forbidden by MCL 339.2412(1) from asserting such an action, the court will determine that such a builder cannot enforce the contract. Alexander v. Neal, 364 Mich. 485, 489-490, 110 N.W.2d 797 (1961). In so ruling, the court will sometimes refer to the contract as "void." See, e.g., Bilt-More Homes, Inc. v. French, 373 Mich. 693, 699, 130 N.W.2d 907 (1964). But in those cases, it is far from clear that the court actually intended to "`imply [that the contract is] a complete nullity,'" devoid of any legal existence at any point in time. Way v. Root, 174 Mich. 418, 425, 140 N.W. 577 (1913) (citation omitted). Rather, the court merely might have determined that the contract could not be enforced by the unlicensed builder; it did not matter whether the contract was unenforceable because it was void ab initio or because some other legal impediment precluded enforcement. In cases proclaiming contracts with an unlicensed builder to be "void," the distinction between a genuinely void contract and a contract that is unenforceable but not altogether void did not often make a difference in the outcome. In the present case, however, that distinction matters.

An analysis of the law regarding the present contract must recognize and closely examine the lengthy line of precedent stating that contracts for the provision of construction services by an unlicensed builder are illegal and therefore void. As recently as 2002, this Court offered the following in Stokes v. Millen Roofing Co., 466 Mich. 660, 672, 649 N.W.2d 371 (2002): "`Contracts by a residential builder not duly licensed are not only voidable but void—and it is not for a trial court to begin the process of attrition whereby, in appealing cases, the statutory bite is made more gentle. . . .'" That assertion was drawn from a quotation in Bilt-More Homes, Inc. v. French, 373 Mich. 693, 699, 130 N.W.2d 907 (1964), which in turn cited Alexander, 364 Mich. at 487, 110 N.W.2d 797, for the proposition. Alexander was apparently the first case in which this Court interpreted a predecessor statute of MCL 339.2412(1); that statute forbade an unlicensed builder from "bring[ing] or maintain[ing] an action in any court of this State for the collection of compensation for the performance of any act or contract for which a license is required. . . ." 1956 CL 338.986.19 In Alexander, we held that a residential builder was barred from bringing an action to collect compensation for a roof he had installed absent the requisite license. We further opined that the licensing statute was enacted "to protect the public from incompetent, inexperienced, and fly-by-night contractors," and that "contract[s] made in violation of a police statute enacted for public protection [are] void and there can be no recovery thereon." Id. at 487, 110 N.W.2d 797 (citation omitted).

In holding the contract void, Alexander cited Turner v. Schmidt Brewing Co., 278 Mich. 464, 270 N.W. 750 (1936), which held that a builder could not recover for services provided in building a beer garden for an unlicensed alcohol vendor. Turner refused to enforce the contract, stating that "`where statutes enacted to protect the public against fraud or imposition, or to safeguard the public health or morals, contain a prohibition and impose a penalty, all contracts in violation thereof are void.'" Id. at 469, 270 N.W. 750, quoting Cashin v. Pliter, 168 Mich. 386, 134 N.W. 482 (1912). "`It is also well settled that, if a contract be void as against public policy, the court will neither enforce it while executory, nor relieve a party from loss by having performed it in part.'" Turner, 278 Mich. at 470, 270 N.W. 750, quoting Richardson v. Buhl, 77 Mich. 632, 661, 43 N.W. 1102 (1889). On the basis of this Court's decision in Turner, a contract for the provision of services by an unlicensed builder has generally been characterized in our courts as a contract that is "illegal" or "against public policy." It is also clear that our cases have sometimes characterized such contracts as "void."20 And Michigan is not alone in this regard; the courts of many states have similarly described contracts made in contravention of licensing statutes.21

The difficulty as pointed out by the Restatement of Restitution and Unjust Enrichment, is that courts have been known to be imprecise with their use of the term "void," and have on occasion mistakenly employed that term to describe a contract when what is actually meant is that a contract is voidable or otherwise unenforceable, and not that it is void ab initio. Thus, "the fact that a particular contract is described by statute or regulation as `illegal,' `unenforceable,' or `void' is not necessarily the end of the inquiry. . . ." 1 Restatement Restitution & Unjust Enrichment, 3d, Illegality, § 32, comment a, p. 507. As one commentator has observed of the law in this realm, "The law is littered with confusion when it comes to the concept of voidness." Schaefer, Beyond a Definition: Understanding the Nature of Void and Voidable Contracts, 33 Campbell L. Rev. 193, 194 (2010).

That confusion has permeated judicial opinions regarding contracts with an unlicensed residential builder. While courts often proclaim these contracts to be "void," see Stokes, 466 Mich. at 672, 649 N.W.2d 371, they have also shown a willingness to allow a homeowner to enforce the contracts against an unlicensed builder. See, e.g., H.A. Smith Lumber & Hardware Co. v. Decina, 258 Mich.App. 419, 437, 670 N.W.2d 729 (2003), rev'd on other grounds, 471 Mich. 925, 689 N.W.2d 227 (2004). Essentially, the courts of this state have on distinct occasions viewed such contracts both as a complete nullity and as enforceable against an unlicensed builder. Those propositions cannot both be true.

So it would seem that at the present a significant amount of uncertainty and inconsistency exists in our state's law regarding the legal status of contracts between a homeowner and an unlicensed residential builder. However, when faced with a legal question, our analysis must begin with any relevant statutes. Detroit Auto. Inter-Ins. Exch. v. Gavin, 416 Mich. 407, 425, 331 N.W.2d 418 (1982). In this case, a statute is in place that governs the relationship between a homeowner and an unlicensed builder: MCL 339.2412(1). That statute, once again, provides that an unlicensed residential builder "shall not bring or maintain an action in a court of this state for the collection of compensation for the performance of an act or contract for which a license is required. . . ." It furthermore imposes a limitation on the unlicensed builder, preventing him from bringing any kind of lawsuit in order to receive compensation for work performed without a license. The statute does not place similar limitations on the actions that may be taken by the homeowner.

However, the statute does not directly address the question at hand—whether the contract between the unlicensed builder and the homeowner is void ab initio or voidable. Therefore, because the statute, on its face, cannot supply a complete answer, we must "determine and effectuate the intent of the Legislature through reasonable construction in consideration of the purpose of the statute and the object sought to be accomplished." Gross v. Gen. Motors Corp., 448 Mich. 147, 158-159, 528 N.W.2d 707 (1995). Despite its lack of clarity on the instant matter, MCL 339.2412(1) allows us nonetheless to deduce several relevant inferences in our effort to discern the Legislature's intent.

First, it is relevant to look at the overall effect of MCL 339.2412(1). As explained, the statute imposes a limitation on an unlicensed residential builder. This Court has previously opined that the evident purpose of this limitation is to "protect the public from incompetent, inexperienced, and fly-by-night contractors." Alexander, 364 Mich. at 487, 110 N.W.2d 797. It thus seems clear that the Legislature, in drafting MCL 339.2412(1), intended the statute to be protective of the homeowner's interests. So with that overarching purpose in mind, we inquire whether this purpose would be better served by treating contracts between an innocent homeowner and an unlicensed builder as void or voidable. We believe that this inquiry militates in favor of treating such contracts as voidable.

If the contract is void, a homeowner defrauded by an unlicensed builder has but a single remedial option: he or she can seek to undo the transaction and restore the status quo ante.22 However, rescission might not be an entirely satisfactory remedy because it might well preclude the homeowner from receiving the full benefit of his or her bargain. That is, instead of undoing the transaction, the homeowner may find it more beneficial to seek damages for a builder's breach of contract. That remedy is only available, however, if the homeowner is entitled to enforce the actual contract against the builder. If the contract were to be treated as void, it would be a complete nullity and there would be nothing for the homeowner to enforce. Therefore, the statute's purpose in protecting the homeowner would seem to be significantly advanced by treating contracts between an innocent homeowner and an unlicensed builder as voidable rather than void.

Second, it is relevant to look at the manner in which MCL 339.2412(1) refers to the business relationship between the homeowner and the unlicensed builder. The statute precludes an unlicensed contractor from bringing an action "for the collection of compensation for the performance of an act or contract for which a license is required . . . without alleging and proving that the person was licensed under this article during the performance of the act or contract." (Emphasis added.) The statute's very use of the term "contract" strongly implies that the Legislature did not intend for all contracts between a homeowner and an unlicensed builder to be rendered altogether void. Void contracts do not in effect exist; indeed, the very term "void contract" is an oxymoron because a contract that is void is not a contract at all. See Black's Law Dictionary (6th ed.) (defining "void contract" as: "[a] contract that does not exist at law") (emphasis added). If the Legislature viewed all contracts between a homeowner and an unlicensed builder as void, it would have no reason to craft a statute preventing an unlicensed builder from enforcing "contracts;" there would be no contracts at all to enforce. We believe that the Legislature's use of the term "contract" further suggests that the contract at issue is voidable and not void.

Third, it is relevant to examine the manner by which MCL 339.2412(1) seeks to achieve its intended purpose. Which parties are affected by operation of the statute, and in what manner? As observed, MCL 339.2412(1) imposes a limitation on the unlicensed builder—he alone is denied the ability to bring lawsuits seeking compensation for unlicensed work. The statute therefore establishes that contracts between a homeowner and an unlicensed builder are characterized by an asymmetrical enforceability. The unlicensed builder is without authority to enforce the contract against the homeowner, but the homeowner suffers no similar statutory disability. Thus, the statute leaves any power of enforceability there may be over the contract exclusively within the hands of the homeowner. This framework is largely in accordance with the nature of a voidable contract. As to such a contract, the party with the power of avoidance has the unilateral option to either rescind the contract and avoid the obligation of performance, or to ratify the contract and render it enforceable. Whitcraft v. Wolfe, 148 Mich.App. 40, 52-53, 384 N.W.2d 400 (1986). A voidable contract, therefore, exhibits a distinctive one-sided enforceability. By contrast, a void contract exhibits a symmetrical unenforceability; both parties are equally denied the authority to enforce. We conclude that the asymmetrical effect of MCL 339.2412(1) further suggests that the contract at issue is voidable and not void.

Fourth, it is relevant to examine not only the words and phrases present in MCL 339.2412(1), but also the words and phrases that are conspicuously absent. It is clear that the statute was designed to limit the enforceability of contracts between the homeowner and the unlicensed builder. However, there is no indication that the Legislature intended to go so far as to mandate that all contracts with an unlicensed residential builder be deemed void ab initio. If the Legislature had intended that result, it could, without much difficulty, have said as much, as it has done in related contexts.23

Fifth, it is relevant that MCL 339.2412(1) says nothing regarding the rights or obligations of third parties. In many situations that can be contemplated, particularly with regard to agreements to build, a contract may serve to transfer rights to one of the parties upon which a third party might reasonably rely. In this case, for example, the contract purportedly gave defendant Willis the right to receive, indorse, and cash insurance checks made out to plaintiffs. Defendant Denaglen argues that it relied on the contract's transfer of indorsement rights when it allowed Willis to cash the checks at its place of business. A contract may also directly give rights to third parties as intended beneficiaries. MCL 600.1405; Schmalfeldt v. North Pointe Ins. Co., 469 Mich. 422, 427-428, 670 N.W.2d 651 (2003). These and other third parties could potentially be harmed if contracts with an unlicensed builder were treated as void; they would be unable to rely on or enforce any transfers of rights or obligations under a void contract. It is therefore clear that by affecting the status of contracts between the homeowner and the unlicensed builder, MCL 339.2412(1) has the potential to inflict a considerable hardship on third parties. However, the statute is again conspicuously silent in this regard; if the Legislature had intended to impose such a hardship or risk on third parties to all contracts involving an unlicensed builder, it is reasonable to think that the Legislature would have offered some express indication to that effect. We believe the statute's silence in this respect further suggests that the contract at issue is voidable and not void.

In summary, we conclude that MCL 339.2412(1) more strongly supports the proposition that contracts between an innocent homeowner and an unlicensed builder are voidable, than that they are void ab initio. This conclusion receives further support from the caselaw of this state.24 As previously explained, many Michigan cases have summarily and imprecisely referred to contracts with an unlicensed residential builder as "void."25 However, those cases generally only prevented the builder from engaging the legal system to receive compensation for services performed without a license, while reinforcing the principle that an unlicensed builder may not enforce a building contract or recover the reasonable value of the builder's services through equity.26 In those cases, it did not matter whether the contract was unenforceable because it was genuinely "void," or because it was unenforceable for some other reason but not a nullity from the outset. In addition, once the Legislature enacted the predecessor of MCL 339.2412(1), most cases ceased referring to contracts with an unlicensed builder as "void," and no longer analyzed their validity under the common law. Instead, courts simply interpreted and straightforwardedly applied MCL 339.2412(1).27 Given the lack of clarity in the common law, some courts apparently wanted to avoid the issue altogether. So despite numerous indications in dicta that courts believed these contracts to be void ab initio,28 there appears to be no Michigan case that has actually held that a transfer of property or rights did not occur at all because the transfer was predicated on a void contract for the provision of construction services by an unlicensed residential builder.

However, there are cases that have allowed a party to enforce a contract that contemplated the provision of services by an unlicensed residential builder,29 suggesting that such contracts are not genuinely void ab initio because, if they were, obviously no party could seek recovery for breach of contract. The contract would never have come into existence in the first place and there would have been no basis for a contractual remedy. Raub v. Smith, 61 Mich. 543, 547, 28 N.W. 676 (1886) ("[I]t has been held that a contract which is void under the statute of frauds cannot be used for any purpose. Such a contract is regarded as a nullity.") (citations omitted). It appears that when the homeowner has been the party seeking to enforce the contract, as opposed to the unlicensed builder, courts have been willing, at least to some extent, to recognize the validity of the contract.

Michigan's application of the "substantial compliance" doctrine in regard to contracts involving an unlicensed builder further suggests that these contracts are not altogether void. Under this doctrine, if an unlicensed builder enters into a contract to provide building services but subsequently obtains the requisite license before he provides services for which the license is required, the contract has been deemed valid and enforceable by the builder.30 Courts applying the doctrine reason that because the builder has been licensed at the time that he begins performance, he has "substantially complied" with the licensing requirement, even though he improperly entered into a contract while unlicensed. Most pertinently, the doctrine could not be invoked if the contract at issue was genuinely void; if it was truly a nullity at the time it was signed, the builder's subsequent licensure could not logically revive or resuscitate a legal obligation that did not exist in the first place. Thus, courts applying this doctrine have not treated contracts with an unlicensed builder as truly void.

In conclusion, we hold that contracts involving an innocent homeowner and an unlicensed residential builder are voidable.31 This conclusion is based on relevant inferences derived from MCL 339.2412(1), which suggest that such contracts are better characterized as voidable rather than void. The caselaw of this state further supports this conclusion. Our courts have for decades indicated that a homeowner may be able to enforce contracts with an unlicensed builder, and that such contracts are not necessarily a nullity from the outset. There has been no instance in which an innocent homeowner was denied the right to enforce a contract against an unlicensed builder because the court deemed the contract void ab initio. So although there has been considerable confusion regarding the proper legal status of these contracts, we believe that treating these contracts as voidable is the only outcome that faithfully applies MCL 339.2412(1) while giving due consideration to our judicial precedents.32

D. DEFAULT

Finally, we must determine whether the trial court erred by refusing to set aside Denaglen's default. A default is a punitive measure used to encourage participation and cooperation in litigation. Rogers v. JB Hunt Transp., Inc., 466 Mich. 645, 653, 649 N.W.2d 23 (2002). Entry of a default judgment is equivalent to an admission of every well-pleaded matter in the complaint. Lesisko v. Stafford, 293 Mich. 479, 481, 292 N.W. 376 (1940). "Once the default of a party has been entered, that party may not proceed with the action until the default has been set aside by the court. . . ." MCR 2.603(A)(3). A default or a default judgment may be set aside pursuant to MCR 2.603(D), which states:

However, "the policy of this state is generally against setting aside defaults and default judgments that have been properly entered." Alken-Ziegler, Inc. v. Waterbury Headers Corp., 461 Mich. 219, 229, 600 N.W.2d 638 (1999). "The carelessness or neglect of either the litigant or his attorney is not normally grounds for granting a belated application to set aside a default regularly entered." White v. Sadler, 350 Mich. 511, 522, 87 N.W.2d 192 (1957). At the same time, a default is merely an admission of liability and not an admission regarding the proper amount of damages. Haller v. Walczak, 347 Mich. 292, 300, 79 N.W.2d 622 (1956) ("In ordinary actions founded on contract or tort the rule seems well established that a default in appearing or pleading admits the right to recover, but not the amount of the damages."). If the amount of damages is in dispute, a defaulting defendant is nonetheless entitled to a hearing, at which it may challenge the plaintiff's alleged damages amount, if the trial court determines that a hearing is necessary. Zaiter v. Riverfront Complex, Ltd., 463 Mich. 544, 554, 620 N.W.2d 646 (2001); MCR 2.603(B)(3)(b).

We hold that the trial court did not abuse its discretion by refusing to set aside Denaglen's default. Even after receiving notice of its default, Denaglen inexplicably waited seven weeks before moving to have the default set aside. In arguing Denaglen's motion to set aside the default, and in their applications for leave to appeal, the parties presented irreconcilable accounts of the circumstances surrounding the default. It was for the trial court to evaluate the credibility and reasonableness of the parties' arguments, and it determined that Denaglen had not made the necessary showing to merit relief from the default. The Court of Appeals did not disturb that ruling by finding any abuse of discretion on the part of the trial court and neither do we. Lawrence M. Clarke, 489 Mich. at 272, 803 N.W.2d 151. However, because this opinion calls into question the legal justifications for the lower courts' decisions in favor of plaintiffs' conversion claims against defendants, the potential for an inconsistent or anomalous result exists. If defendant Willis is not liable for converting the insurance checks, then logically Denaglen could not have converted the checks, either. In the face of such an outcome, Denaglen's default, as to the conversion claim only, would need to be set aside. See Ackron Contracting Co. v. Oakland Co., 108 Mich.App. 767, 774, 310 N.W.2d 874 (1981) ("[W]here a bill makes a joint charge against several defendants, and one of them makes default, . . . if the suit should be decided against the complainant on the merits, the bill will be dismissed as to all the defendants alike—the defaulter as well as the others."), quoting Frow v. De La Vega, 82 U.S. (15 Wall.) 552, 554, 21 L.Ed. 60 (1872).

IV. APPLICATION

The contract between defendant Willis, the unlicensed builder, and plaintiff homeowners was voidable. Because the contract was not a nullity from the outset, it could in theory have conveyed to Willis the authority to receive, indorse, and cash the insurance checks. The trial court, however, granted plaintiffs summary disposition without deciding whether the contract, if valid, would have conferred that authority on Willis. We therefore remand to that court for a determination of whether the agreement granted Willis and his companies the specific authority to perform those actions on plaintiffs' behalf and whether they acted within the scope of that authority.33

If on remand the trial court determines that Willis and his companies might be liable for any of plaintiffs' claims arising under the contract, those defendants must be permitted to defend against those claims. Neither Willis's breach of the contract nor MCL 339.2412(1) prevent Willis from demanding that plaintiffs prove their actual damages. If plaintiffs seek judicial redress, including damages, they are required to prove the extent to which they have been harmed by defendants and defendants are entitled to rebut those proofs.34 Additionally with regard to any outstanding equitable claims, such as restitution, plaintiffs must also be prepared to establish that they have acted equitably. Goodenow v. Curtis, 33 Mich. 505, 509 (1876). Finally, as discussed earlier in this opinion, the trial court did not abuse its discretion by refusing to set aside Denaglen's default. However, if on remand the trial court determines that defendant Willis and his companies are not liable for converting the insurance checks, that court must set aside Denaglen's default in regard to plaintiffs' conversion claim. This is because Denaglen logically may only be held liable for conversion if Willis actually converted the checks from plaintiffs. It is clear that Denaglen did not convert the checks directly from plaintiffs; therefore, any conversion for which Denaglen may be held liable would have been committed indirectly through Willis. Denaglen thus may not be held liable for conversion if Willis is not. Furthermore, the amount of plaintiffs' damages remains in dispute as already noted. Denaglen is therefore entitled to participate in any hearing that the trial court deems necessary to establish the amount of conversion damages owed to plaintiffs.

V. CONCLUSION

The trial court and Court of Appeals erred by granting summary disposition in favor of plaintiffs. The Court of Appeals correctly held that MCL 339.2412(1) does not prevent an unlicensed builder from defending against a lawsuit on its merits and does not afford a homeowner an independent cause of action to seek damages for its violation. However, contracts between an innocent homeowner and an unlicensed residential builder are voidable by the homeowner and thereby effective in conveying rights and authorities to both parties and third parties. The Court of Appeals therefore erred when it declared the contract at issue void ab initio, although that court's error was wholly understandable given the confusing state of applicable law. Finally, the trial court did not abuse its discretion by refusing to grant defendant Denaglen relief from its default. However, because the proper amount of damages remains in dispute, Denaglen may attempt to challenge the extent of its liability. We therefore affirm in part and reverse in part the judgment of the Court of Appeals and remand to the trial court for further proceedings consistent with this opinion.

YOUNG, C.J., and MARY BETH KELLY, ZAHRA, McCORMACK, VIVIANO, and BERNSTEIN, JJ., concurred with MARKMAN, J.