This paper reports on a study of the implementation and evaluation of learning contracts in a clinical context for a group of students who were in their third year of study in a pre-registration bachelor of nursing degree programme in Hong Kong. A learning contract was implemented as a learning tool in the students' clinical placement in mental health nursing. An action research approach was used in this study. Data were collected from questionnaires and interviews with students and clinical instructors. Results showed that students and clinical instructors generally agreed that there was an increase in students' autonomy and motivation in learning with the use of a learning contract. It also increased the sharing between students and clinical instructors. The findings of the questionnaire and interviews supported each other. However, the lack of experience in using contract learning and the limited time in the clinical areas created difficulties for both students and clinical instructors. Despite the limitations, contract learning is considered beneficial to students' learning and has the potential to be used in clinical learning.