diff --git a/package.json b/package.json
index 18d4e98..99f05a3 100644
--- a/package.json
+++ b/package.json
@@ -30,10 +30,10 @@
     "uuid": "^3.0.1"
   },
   "devDependencies": {
-    "chai": "~3.5.0",
+    "chai": "^4.1.2",
     "eslint": "^4.19.1",
     "eslint-config-loopback": "^10.0.0",
     "loopback-datasource-juggler": "^3.12.0",
-    "mocha": "^3.2.0"
+    "mocha": "^5.2.0"
   }
 }
diff --git a/test/transaction.test.js b/test/transaction.test.js
index 4fdc069..9ce4d88 100644
--- a/test/transaction.test.js
+++ b/test/transaction.test.js
@@ -173,24 +173,26 @@ describe('transactions', function() {
   });
 
   describe('timeout', function() {
+    const TIMEOUT = 50;
     before(function() {
       // Reset the collection
       db.connector.data = {};
     });
 
     var post = {title: 't3', content: 'c3'};
-    before(createPostInTx(post, 50));
+    beforeEach(createPostInTx(post, TIMEOUT));
 
     it('should report timeout', function(done) {
-      setTimeout(function() {
+      // wait until the "create post" transaction times out
+      setTimeout(runTheTest, TIMEOUT * 3);
+
+      function runTheTest() {
         Post.find({where: {title: 't3'}}, {transaction: currentTx},
           function(err, posts) {
-            if (err) return done(err);
-            expect(posts.length).to.be.eql(1);
+            expect(err).to.match(/transaction.*not active/);
             done();
           });
-      }, 300);
-      done();
+      }
     });
 
     it('should invoke the timeout hook', function(done) {
@@ -198,6 +200,10 @@ describe('transactions', function() {
         next();
         done();
       });
+
+      // If the event is not fired quickly enough, then the test can
+      // quickly fail - no need to wait full two seconds (Mocha's default)
+      this.timeout(TIMEOUT * 3);
     });
   });