Mental Capacity Assessment
Mental Capacity Assessment to Enter into a Contract
A capacity to contract assessment is a decision-specific assessment of whether a person can enter into a specific contract at the time the decision needs to be made, applying the Mental Capacity Act 2005. It is not a general opinion about capacity overall. It is focused on the exact agreement in issue, such as a conditional fee agreement, settlement agreement, loan, guarantee, tenancy or business document, and the information relevant to that agreement.
Court-ready, decision-specific contract capacity assessments for families, solicitors and professionals across England and Wales.
At a glance
Decision
Entering into a contract or agreement
Legal framework
Mental Capacity Act 2005 and Imperial Loan Co v Stone
Format
Face to face or remote
Report
Court-ready and peer reviewed
Coverage
England and Wales
£600 + VAT
Standard fee, stated before instruction
5 working days
Turnaround from assessment visit
England and Wales
Nationwide coverage
Decision-specific
Focused on the exact agreement
Plain-English explanation
What is a mental capacity assessment?
A mental capacity assessment is a decision-specific and time-specific process used to determine whether a person can make a particular decision for themselves. Under the Mental Capacity Act 2005, the assessor considers whether the person can understand, retain, use or weigh the relevant information, and communicate their decision. A person can only be found to lack capacity where an impairment of, or disturbance in, the functioning of the mind or brain causes their inability to decide. It is not a general test of intelligence, memory or diagnosis, and every practicable step must first be taken to support the person to make the decision.
The decision might concern a purchase, a credit or finance agreement, a tenancy, a care or service agreement, a settlement, or another binding commitment.
Capacity can differ between decisions. A person may be able to agree a routine purchase while being unable to weigh the terms of a long-term, high-value or complex agreement.
An unwise decision is not the same as lacking capacity
The assessor does not decide whether the person is making the best choice. The issue is whether the person can make the relevant decision, not whether others agree with it.
Common situations
When you may need a capacity to contract assessment
A capacity to contract assessment is usually needed where an individual is being asked to sign or agree to something with legal effect, and there is doubt about whether they can make that decision independently.
This commonly arises where a person has a diagnosis affecting cognition, where their presentation has changed over time, where there is a brain injury or mental health condition, or where the agreement itself carries significant consequences or risk. It is also frequently needed where solicitors or other professionals require formal evidence before progressing a matter, particularly if the contract may later be challenged.
High-value commitment
The person is about to sign a credit agreement, lease, finance arrangement or other significant contract.
Concerns about pressure
There are concerns about doorstep selling, cold calling, coercion, undue influence or a contract agreed under pressure.
A professional requires evidence
A solicitor, lender or bank needs independent evidence of capacity before the agreement can proceed.
A signed contract is questioned
A party is questioning whether the person had capacity at the point the agreement was made.
Tenancy or care agreement
The person must decide about a tenancy, a placement or a care and support agreement.
Change in circumstances
There has been a cognitive, neurological, psychiatric or functional change affecting the person's decision-making.
Decision-specific content
What this assessment covers
This assessment addresses the person's capacity to enter into a specific contract or agreement. It is decision-specific: the assessor tests the actual agreement in question, not a general impression. In line with the Mental Capacity Act 2005, and alongside the long-standing common law position in Imperial Loan Co Ltd v Stone [1892] 1 QB 599, the assessment considers whether the person can understand, retain, use or weigh the information relevant to that agreement, and communicate their choice. The information relevant to entering into a contract typically includes:
What the agreement commits them to do, and what the other party must do in return
What they will receive, and what they must pay or give up to get it
How long the commitment lasts, and whether and how it can be brought to an end
What could happen if they cannot keep to the agreement, including charges, interest or loss of the item
That they could take advice, compare alternatives or decline the agreement altogether
The effect the commitment would have on their wider finances and on anyone who depends on them
The relevant information must be tailored
Agreeing a mobile phone contract is not the same decision as signing a lease or a large credit agreement. The assessor identifies the information that is genuinely relevant to the decision in question.
1
The functional test
The assessment applies the Mental Capacity Act 2005 to the specific contractual decision in issue. The Law Society identifies entering into a contract as a legally significant decision for which capacity may need to be assessed. The question is whether, at the time the contract is being considered, the person can:
Understand the information relevant to the contract, including its obligations, risks and consequences
Retain that information long enough to make the decision
Use or weigh that information as part of the decision-making process
Communicate their decision by any means
2
Impairment and causation
The question is not simply whether the person has a diagnosis or appears vulnerable. If they cannot do one or more of these, the assessor considers whether that is because of an impairment of, or disturbance in, the functioning of the mind or brain. Solicitors should also be alive to undue influence, and to the fact that capacity may differ across different kinds of legal or financial decisions, because a transaction can be set aside where there is a lack of capacity or undue influence.
Framework: Mental Capacity Act 2005 ss 1 to 3; Law Society guidance identifying entering into a contract as a legally significant decision, and warning that transactions may be set aside for lack of capacity or undue influence.
For a related risk, read our guide: undue influence and coercion in capacity assessments.
Legal framework
The legal test for a capacity to contract assessment
Initial enquiry and triage
Contact us by phone, email or website form. We gather the key details, explain how the assessment works, and confirm the specific contract that needs to be assessed.
Quotation and booking
Once we understand the scope, we provide a clear quotation including VAT and any applicable travel costs, and arrange a suitable appointment as quickly as possible.
Assessment appointment
A qualified assessor meets the person face to face, or remotely where appropriate, and carries out a decision-specific contract capacity assessment.
Report preparation and peer review
The findings are written up clearly and reviewed by a second qualified professional for quality and consistency.
Secure delivery
Your completed report is returned securely, usually within your stated turnaround period, with reasonable minor amendments or clarification available after delivery.
What happens next
Our capacity to contract process
Supported decision-making
How we support decision-making
The Mental Capacity Act 2005 requires that no one is treated as unable to make a decision unless all practicable steps to help them have been taken without success. That support is built into every assessment:
Plain language and real examples
Decisions are explained using the person's own circumstances and the decision actually in front of them, rather than abstract scenarios.
The right time and place
Appointments are arranged for when the person functions best, at home, in a care setting, in hospital or remotely.
A familiar person nearby
A relative, friend or carer can be close at hand where that reassures, while the assessment itself remains independent.
Communication adjustments
More time, information broken into stages, and written notes or aids where they help the person express a view.
Evidence base
Evidence we review
With consent, the assessor grounds the assessment in the person's real circumstances. For a contractual capacity assessment this typically means reviewing:
Medical records
GP summaries, hospital letters and any information about diagnosis or treatment that bears on decision-making.
The agreement itself
The contract, terms and any accompanying paperwork, so the assessment addresses the actual commitment in front of the person.
Financial records
Income, outgoings and existing commitments, so the effect of the agreement can be understood in context.
Previous assessments
Earlier capacity assessments, cognitive testing or social care assessments, where these exist.
Care and support records
Care plans and daily notes that describe how the person manages tasks and commitments day to day.
Accounts from people who know the person
Observations from family, friends and professionals about how the person handles agreements in practice.
Deliverable
What the assessor evaluates
A well-reasoned assessment explains how the conclusion has been reached, rather than simply stating an outcome, tied to the actual agreement in issue.
The exact contract or proposed agreement being assessed
Whether the person was given the relevant information in a way they can understand
Whether they can retain the key points long enough to decide
Whether they can use or weigh the advantages, risks and consequences
Whether they can communicate a clear decision
Whether there is an impairment or disturbance in the functioning of the mind or brain
Whether that impairment is causing the difficulty in relation to this specific contract
The support provided, the person's views, and any concerns about pressure or influence
Assessment option | Suitable for | What is included |
|---|---|---|
Standard Assessment | Most contractual capacity questions | |
Enhanced Assessment (EMCA) | Contested, high-value or high-risk matters | |
Court-specific instruction | Court of Protection or other proceedings |
Who we work with
For solicitors, deputies and other professionals
Instruction is straightforward and the evidential standard is consistent whichever decision is being assessed:
Scope confirmed in writing
The decisions to be assessed, the fee and the timescale are confirmed in writing before instruction.
A traceable evidential line
Evidence, analysis and conclusion are set out in a structure a court, bank or public body can scrutinise.
Peer review as standard
A second qualified professional reviews every report before it leaves the practice.
Follow-up clarification
Clarification for instructing parties is included after the report is delivered.
Standard Assessment
£600 + VAT
- Decision-specific assessment of the exact contract
- Completed in line with sections 2 and 3 of the Mental Capacity Act 2005
- MoCA where appropriate
- Clear, court-ready report
For most agreements where the decision is clear and undisputed.
Add paragraph text. Click “Edit Text” to update the font, size and more. To change and reuse text themes, go to Site Styles.
Enhanced Assessment
£3,500 + VAT
- Extended, multi-layered assessment
- Structured analysis of vulnerability and undue influence
- Broader evidential framework for likely challenge
- Robust reporting where the agreement may later be disputed
For complex, high-value or contested agreements, or where undue influence is a concern.
Add paragraph text. Click “Edit Text” to update the font, size and more. To change and reuse text themes, go to Site Styles.
Transparent pricing
Standard or Enhanced, which does your agreement need?
A standard assessment is right for most agreements where the decision is clear and undisputed. Where the agreement is complex, high in value or contested, or where undue influence is a live concern, an enhanced assessment provides a deeper, more defensible evidential foundation.
For families
A clear fee, stated before instruction and confirmed in writing, with VAT and any travel set out up front. The assessment is arranged around the person, at home, in a care setting, in hospital or remotely, and your report is delivered within 5 working days of the assessment visit, in a form banks, solicitors and the Court of Protection can rely on.
For professionals
A permanent, employed multidisciplinary team, not an ad hoc associate or referral-panel model: Social Work England and Social Care Wales registered social workers and a Chartered Psychologist (BPS). Every report is peer reviewed by a second qualified professional and structured for scrutiny, with reports relied on in the Court of Protection, the Family Court and the Court of Appeal.
Provider evidence
Why choose Nellie Supports for your mental capacity assessment
England and Wales' largest identified specialist private social work and mental capacity assessment practice, with over 11,000 formal assessments and reports completed by a permanent full-time multidisciplinary team.
Why families, solicitors and professionals choose Nellie Supports
Decision-specific, not generic
We focus on the exact contract in issue and the information relevant to it, not a broad opinion about capacity overall.
Alert to undue influence
Contract cases often involve pressure or vulnerability, so we address influence carefully and keep it distinct from the capacity question.
Evidence-based and clearly reasoned
Reports structured for legal and professional use, suitable where an agreement may later be challenged.
Therapeutic assessment interviews
A calm, supportive conversation that helps the person engage as fully as possible.
Employed, not outsourced
A permanent full-time team, peer reviewing every report, not an ad hoc panel of associates.
Standard and enhanced
The right depth of evidence for the agreement, from focused opinions to enhanced, multi-layered evaluations.
The situation
An older woman was being asked to act as guarantor on a family member's business loan. Her solicitor was concerned both about whether she understood what she was agreeing to and about whether she was under pressure to sign. They instructed Nellie Supports to assess her capacity to enter into the guarantee.
The assessment
We met her at home and focused on the specific agreement: what a guarantee is, what obligations it created, what she stood to lose if the loan was not repaid, and what would happen if she declined. Information was given clearly and at her pace, and we recorded the support provided and any signs of pressure.
The outcome
The report gave the solicitor clear, decision-specific evidence about the client's capacity, and a separate, careful account of the concerns about pressure, so the matter could proceed on a sound and defensible footing.
This is an illustrative example, drawn from the common features of the contract capacity cases we assess. It does not describe any individual client.
How this works in practice
Frequently asked questions
Common contract capacity questions
What kinds of contracts can this assessment cover?
It can cover a wide range of contracts, including legal funding agreements, settlement agreements, tenancy-related documents, guarantees, loans and other binding agreements, provided the exact decision is identified clearly at the outset.
Is capacity to contract the same as capacity to litigate?
No. These are separate decisions with different legal focuses. A person may have capacity for one and not the other.
Can someone with dementia still have capacity to enter into a contract?
Yes. A diagnosis alone does not decide the issue. The key question is whether the person can make the specific contractual decision at the relevant time.
Do you need access to the draft contract?
Usually, yes, or at least a clear summary of its terms, because contract capacity is decision-specific and the relevant information must be tied to the actual agreement.
What if there are concerns about pressure or undue influence?
Those concerns can and should be considered. The Law Society warns that a transaction may be set aside not only for lack of capacity but also where it was made through the undue influence of another. We assess capacity and address influence carefully, keeping the two questions distinct.
What if the person's capacity fluctuates?
Timing matters. Capacity can be time-specific, so the assessment should be carried out as close as possible to the decision point and under conditions that best support the person.
What if the assessment does not reach the conclusion we hoped for?
Our assessments are independent, and that independence is what gives the report its value. We do not begin from a preferred answer. We assess the specific decision on its merits and record the reasoning, whatever the conclusion. A report that only ever confirmed what was hoped for would carry no weight with a solicitor, the Court of Protection or anyone else relying on it.
Where do you cover?
Assessments are carried out across England and Wales, at home, in care settings, in hospital or remotely where appropriate. Travel is charged at £40 per hour and confirmed before booking.
Who will carry out the assessment?
A registered professional from our permanent, employed team, which includes Social Work England and Social Care Wales registered social workers and a Chartered Psychologist (BPS). Every report is peer reviewed by a second qualified professional before delivery.
How to instruct a mental capacity assessor
Getting the instruction and evidence right
Undue influence and coercion in capacity assessments
Keeping influence distinct from capacity
Who can assess mental capacity?
The professionals involved and what makes an assessment suitable
Independence and conflicts of interest in capacity assessments
Why independence protects the evidence
Assessing multiple decisions in one capacity instruction
When more than one decision can be covered together
Supporting guidance
Capacity to contract guides
Capacity to Manage Finances
Independent, decision-specific assessment of capacity to manage money, property and financial affairs.
Capacity to litigate assessment
For conducting legal proceedings, including the Certificate as to Capacity to Conduct Proceedings.
COP3 mental capacity assessment
For Court of Protection deputyship applications.
Other assessment types
Discuss the instruction
Book a capacity to contract assessment
Tell us about the agreement in question and we will confirm whether a standard or enhanced assessment is right, the fee, and the earliest appointment.
Written by Ben Slater, Founder and Managing Director, Nellie Supports. Read our editorial policy.