diff --git a/src/main.cpp b/src/main.cpp
index a95f7cf2d..c8a70488b 100644
--- a/src/main.cpp
+++ b/src/main.cpp
@@ -941,7 +941,7 @@ bool AcceptToMemoryPool(CTxMemPool& pool, CValidationState &state, const CTransa
 
         // Check against previous transactions
         // This is done last to help prevent CPU exhaustion denial-of-service attacks.
-        if (!CheckInputs(tx, state, view, true, SCRIPT_VERIFY_P2SH | SCRIPT_VERIFY_STRICTENC))
+        if (!CheckInputs(tx, state, view, true, STANDARD_SCRIPT_VERIFY_FLAGS))
         {
             return error("AcceptToMemoryPool: : ConnectInputs failed %s", hash.ToString());
         }
diff --git a/src/main.h b/src/main.h
index 38b39d3c8..e758a374c 100644
--- a/src/main.h
+++ b/src/main.h
@@ -328,7 +328,7 @@ int GetRequiredMaturityDepth(int nHeight);
 // This does not modify the UTXO set. If pvChecks is not NULL, script checks are pushed onto it
 // instead of being performed inline.
 bool CheckInputs(const CTransaction& tx, CValidationState &state, CCoinsViewCache &view, bool fScriptChecks = true,
-                 unsigned int flags = SCRIPT_VERIFY_P2SH | SCRIPT_VERIFY_STRICTENC,
+                 unsigned int flags = STANDARD_SCRIPT_VERIFY_FLAGS,
                  std::vector<CScriptCheck> *pvChecks = NULL);
 
 // Apply the effects of this transaction on the UTXO set represented by view
diff --git a/src/miner.cpp b/src/miner.cpp
index 6e5e6a656..6a1f36872 100644
--- a/src/miner.cpp
+++ b/src/miner.cpp
@@ -280,8 +280,11 @@ CBlockTemplate* CreateNewBlock(const CScript& scriptPubKeyIn)
             if (nBlockSigOps + nTxSigOps >= MAX_BLOCK_SIGOPS)
                 continue;
 
+            // Note that flags: we don't want to set mempool/IsStandard()
+            // policy here, but we still have to ensure that the block we
+            // create only contains transactions that are valid in new blocks.
             CValidationState state;
-            if (!CheckInputs(tx, state, view, true, SCRIPT_VERIFY_P2SH))
+            if (!CheckInputs(tx, state, view, true, MANDATORY_SCRIPT_VERIFY_FLAGS))
                 continue;
 
             CTxUndo txundo;
diff --git a/src/rpcrawtransaction.cpp b/src/rpcrawtransaction.cpp
index cfb38e9e0..223e10b0a 100644
--- a/src/rpcrawtransaction.cpp
+++ b/src/rpcrawtransaction.cpp
@@ -722,7 +722,7 @@ Value signrawtransaction(const Array& params, bool fHelp)
         {
             txin.scriptSig = CombineSignatures(prevPubKey, mergedTx, i, txin.scriptSig, txv.vin[i].scriptSig);
         }
-        if (!VerifyScript(txin.scriptSig, prevPubKey, mergedTx, i, SCRIPT_VERIFY_P2SH | SCRIPT_VERIFY_STRICTENC, 0))
+        if (!VerifyScript(txin.scriptSig, prevPubKey, mergedTx, i, STANDARD_SCRIPT_VERIFY_FLAGS, 0))
             fComplete = false;
     }
 
diff --git a/src/script.cpp b/src/script.cpp
index 7ef8630f5..10d79e649 100644
--- a/src/script.cpp
+++ b/src/script.cpp
@@ -1659,7 +1659,7 @@ bool SignSignature(const CKeyStore &keystore, const CScript& fromPubKey, CTransa
     }
 
     // Test solution
-    return VerifyScript(txin.scriptSig, fromPubKey, txTo, nIn, SCRIPT_VERIFY_P2SH | SCRIPT_VERIFY_STRICTENC, 0);
+    return VerifyScript(txin.scriptSig, fromPubKey, txTo, nIn, STANDARD_SCRIPT_VERIFY_FLAGS, 0);
 }
 
 bool SignSignature(const CKeyStore &keystore, const CTransaction& txFrom, CTransaction& txTo, unsigned int nIn, int nHashType)
diff --git a/src/script.h b/src/script.h
index 1742ce81f..f6e5f045a 100644
--- a/src/script.h
+++ b/src/script.h
@@ -192,6 +192,18 @@ enum
     SCRIPT_VERIFY_NOCACHE   = (1U << 3), // do not store results in signature cache (but do query it)
 };
 
+// Mandatory script verification flags that all new blocks must comply with for
+// them to be valid. (but old blocks may not comply with) Currently just P2SH,
+// but in the future other flags may be added, such as a soft-fork to enforce
+// strict DER encoding.
+static const unsigned int MANDATORY_SCRIPT_VERIFY_FLAGS = SCRIPT_VERIFY_P2SH;
+
+// Standard script verification flags that standard transactions will comply
+// with. However scripts violating these flags may still be present in valid
+// blocks and we must accept those blocks.
+static const unsigned int STANDARD_SCRIPT_VERIFY_FLAGS = MANDATORY_SCRIPT_VERIFY_FLAGS |
+                                                         SCRIPT_VERIFY_STRICTENC;
+
 enum txnouttype
 {
     TX_NONSTANDARD,