Michigan Builder Salesperson License Pt.
2 Exam 2026 Questions and Answers
Graded A+
Agent - Correct answer-Someone with the authority to bind someone else by
contract- most of the salespeople you deal with are this.
Agent-Principal Relationship - Correct answer-As long as agents do not exceed the
authority granted them by their principals, contracts they make bind their
principals as if the principals had made the contracts themselves. While acting on
behalf of principals, agents are required to put their own interests after those of the
principal.
Exceeding Authority - Correct answer-Under the doctrine of apparent authority, if
the person they're dealing with doesn't reasonably understand that they're
exceeding their authority, the principal may be bound by the contract negotiated by
the agent. An example of this would be an automobile salesperson signs a contract
on behalf of a car dealer which, without the dealer's authority, gives the customer a
warranty for 40,000 extra miles. In that case, the dealer might very well be bound
by the contract.
,Contracts - Correct answer-Agreements entered into voluntarily by two or more
parties who promise to exchange money, goods, or services according to a
schedule.
Typical rules to follow when considering a contract - Correct answer-Oral contracts
are valid but often difficult to enforce.
Oral contracts are NEVER valid in Michigan for residential construction projects.
All contracts must be entered into willingly and freely.
The contract content must be legal.
Minors, the insane, and others viewed by law as unable to care for themselves are
usually forbidden from signing contracts.
Clarity of Language - Correct answer-One of the most important aspects of
interpreting contracts and avoiding disputes.
In the event of a conflict in the terms of a contract, these rules apply: - Correct
answer-Specific provisions over general provisions.
Handwritten provisions over typed provisions. An ink pen is the most powerful
contract tool you own.
Typed provisions over printed provisions.
Words over numbers.
, Specifications over drawings.
Required Contract Elements - Correct answer-Offer, Acceptance, Consideration,
Competent parties, and a legal purpose.
Typical content of a home building contract includes: - Correct answer-1. Names of
all parties
2. Addresses of all parties
3. Phone, fax, email contacts, and procedures
4. Date of contract
5. Property description
6. Street address
7. Subdivision
8. Homeowners association if any
9. Amount of contract
10. Terms of financing
11. Construction draw schedule
12. Construction draw procedure
13. Insurance requirements
2 Exam 2026 Questions and Answers
Graded A+
Agent - Correct answer-Someone with the authority to bind someone else by
contract- most of the salespeople you deal with are this.
Agent-Principal Relationship - Correct answer-As long as agents do not exceed the
authority granted them by their principals, contracts they make bind their
principals as if the principals had made the contracts themselves. While acting on
behalf of principals, agents are required to put their own interests after those of the
principal.
Exceeding Authority - Correct answer-Under the doctrine of apparent authority, if
the person they're dealing with doesn't reasonably understand that they're
exceeding their authority, the principal may be bound by the contract negotiated by
the agent. An example of this would be an automobile salesperson signs a contract
on behalf of a car dealer which, without the dealer's authority, gives the customer a
warranty for 40,000 extra miles. In that case, the dealer might very well be bound
by the contract.
,Contracts - Correct answer-Agreements entered into voluntarily by two or more
parties who promise to exchange money, goods, or services according to a
schedule.
Typical rules to follow when considering a contract - Correct answer-Oral contracts
are valid but often difficult to enforce.
Oral contracts are NEVER valid in Michigan for residential construction projects.
All contracts must be entered into willingly and freely.
The contract content must be legal.
Minors, the insane, and others viewed by law as unable to care for themselves are
usually forbidden from signing contracts.
Clarity of Language - Correct answer-One of the most important aspects of
interpreting contracts and avoiding disputes.
In the event of a conflict in the terms of a contract, these rules apply: - Correct
answer-Specific provisions over general provisions.
Handwritten provisions over typed provisions. An ink pen is the most powerful
contract tool you own.
Typed provisions over printed provisions.
Words over numbers.
, Specifications over drawings.
Required Contract Elements - Correct answer-Offer, Acceptance, Consideration,
Competent parties, and a legal purpose.
Typical content of a home building contract includes: - Correct answer-1. Names of
all parties
2. Addresses of all parties
3. Phone, fax, email contacts, and procedures
4. Date of contract
5. Property description
6. Street address
7. Subdivision
8. Homeowners association if any
9. Amount of contract
10. Terms of financing
11. Construction draw schedule
12. Construction draw procedure
13. Insurance requirements
