This paper examines the implementation of learning contracts with a cohort of undergraduate nursing students in Hong Kong during a mental health nursing clinical placement. An action learning approach was used by the researchers. Data collection methods included questionnaires and semi-structured interviews. Results showed that students' autonomy and motivation in clinical learning increased through the use of learning contracts. There was more sharing between students and teachers and the quality of teaching and learning was improved. The report concludes that contract learning should be integrated into the curriculum of nurse education as a learning strategy for nursing students.