Class 3.2: Nick Szabo & Smart Contracts: Hardcoding Consideration Quiz

Q1: What is 'automated fiduciary verification' in legal engineering?

Enforcing fiduciary duties programmatically through pre-execution compliance gates before assets move
Hiring external accountants to audit books annually
Trusting corporate officers without verification

Q2: How do AI verification gates protect corporate treasuries?

Algorithmically evaluate transaction payloads against corporate bylaws before granting execution signatures
Automatically transfer corporate funds to AI companies
Replace human board directors with AI bots

Q3: What constitutes a 'computational legal runtime'?

An execution environment where legal bylaws and contractual covenants operate as active code
A court trial scheduling software
A legal word processor program

Q4: How does Nick Szabo's smart contract concept inform runtime law design?

Hardcodes contractual terms into software and hardware to minimize reliance on post-hoc litigation
Bans all legal prose
Replaces contract law with computer games

Q5: What is 'hardcoding consideration' in automated legal runtimes?

Ensuring asset value transfers and performance obligations execute simultaneously and atomically
Paying cash to software developers
Ignoring financial terms in contracts

Q6: How do AI verification gates handle ambiguous transaction requests?

Revert transaction execution and route the request to human director review
Approve all ambiguous transactions automatically
Delete the corporate treasury

Q7: What is 'fiduciary duty' in computational corporate governance?

The legal and ethical obligation of managers to act in the best interest of members and entity beneficiaries
An optional corporate guideline
A tax filing requirement

Q8: How does ERC-7827 state versioning assist fiduciary auditing?

Provides an immutable, tamper-evident audit trail of all corporate state shifts and approval hashes
Hides transaction logs from members
Allows officers to alter past records

Q9: What is 'atomic execution' in automated legal transactions?

Ensuring all required condition gates and transfers succeed together or the entire state reverts
Executing transactions over a 30-day period
Splitting payments into separate manual steps

Q10: How do runtime laws prevent unauthorized corporate asset drain?

Require multi-signature threshold approvals and automated programmatic limit checks
Rely on annual paper audit reports
Allow single-signature unlimited withdrawals

Q11: What role do cryptographic signets play in fiduciary verification?

Provide mathematical proof of director approval for corporate state transition requests
Act as decorative email signatures
Encrypt public web pages

Q12: How does automated fiduciary verification reduce corporate insurance premiums?

Eliminates employee embezzlement risks through programmatic multi-sig compliance gates
Increases corporate litigation risks
Requires physical security guards

Q13: What is 'post-hoc litigation' in traditional law?

Attempting to recover stolen or misused assets through expensive court trials after damage occurs
Writing contracts before business starts
Filing corporate tax returns on time

Q14: How do AI verification gates verify compliance with Delaware LLC bylaws?

Parse bylaws into AST predicate trees and verify transaction parameters against defined threshold rules
Ask AI models for legal opinions
Scan paper PDF bylaws

Q15: What is 'state reversion' when a fiduciary gate fails?

Restoring the contract storage to its exact pre-transaction state hash without asset loss
Deleting the smart contract code
Sending funds to a burn address

Q16: How do runtime laws enable continuous corporate compliance auditing?

Audit every individual transaction state shift in real-time as it executes
Audit company books once every 5 years
Rely on self-reporting by executives

Q17: What is 'fiduciary parameterization' in legal contract design?

Translating subjective legal duties (care, loyalty) into concrete numerical threshold variables
Eliminating fiduciary duties entirely
Writing longer legal briefs

Q18: How do Socratic assessments evaluate student understanding of fiduciary runtimes?

Test deep technical knowledge of compliance gates, AI verification, and atomic state execution
Grade students based on attendance
Require paper essay submission

Q19: What is the relationship between automated fiduciary verification and open-source public goods?

Provides transparent, trustless governance infrastructure that protects public treasury reserves
Monopolizes software tools for private law firms
Increases administrative overhead

Q20: Why is computational fiduciary enforcement superior to traditional paper-based oversight?

Prevents unauthorized breaches before execution rather than relying on costly post-hoc court lawsuits
Costs more money to maintain
Requires paper receipts for all expenditures