A Cook County jury just delivered a verdict in one of the most watched artist management agreement disputes in years. Chance the Rapper prevailed against his former manager, Pat Corcoran, who claimed he was owed $3.8 million under a deal that was never put in writing. The two operated on a handshake for seven years. When the relationship ended, so did any clarity about what was owed.
This case is a cautionary tale for every artist, manager, and entertainment professional who thinks a verbal agreement is good enough. Here is what happened, why it matters, and the specific contract terms that would have prevented a five-year legal battle.
What Happened Between Chance the Rapper and His Manager
Chancelor Bennett and Pat Corcoran began working together around 2012, when Chance was an emerging artist on the strength of his early mixtapes. Their arrangement was simple: Pat would manage Chance’s career in exchange for 15% of net profits on projects he worked on.
There was no signed contract. No written music management contract. Just a verbal agreement between friends.
That arrangement lasted roughly seven years. During that time, Chance paid Corcoran over $11 million, making him the highest-paid individual on the payroll of Chance the Rapper LLC. By any measure, the relationship produced significant financial results for both parties.
Then in 2020, Chance terminated the management relationship. Corcoran filed suit, claiming he was entitled to an additional $3.8 million under a sunset clause that guaranteed continued royalty payments for three years after termination. Chance’s position was that no such clause existed because nothing was ever documented.
On March 20, 2026, a Cook County jury sided with Chance. Corcoran failed to prove the terms he claimed. The jury awarded Chance $35 on his countersuit and recommended that Corcoran turn over the domain ChanceRaps.com, which he had been using to sell Chance’s merchandise.
Five years of litigation. Millions in legal fees. A friendship destroyed. All over terms that a two-page agreement could have clarified from the start.
Are Verbal Contracts Enforceable in the Music Industry?
This is the question that comes up every time a handshake deal in the music industry falls apart. The short answer is yes — verbal contracts are generally enforceable under the law, including in Illinois where this case was tried. As the Illinois Compiled Statutes confirm, oral agreements can create binding obligations — the challenge is proving what those obligations were.
The problem is never whether a verbal agreement can be enforced. The problem is proving what the terms actually were. When two people disagree about a conversation that happened years ago, with no written record, no witnesses, and no email trail, the dispute becomes a credibility contest.
Corcoran argued the agreement included a sunset provision entitling him to continued commissions after termination. Bennett argued the relationship was at-will and all obligations ended when Corcoran was let go. Without a signed artist management agreement, neither side could point to definitive terms. This is precisely why a written artist management agreement matters — it eliminates ambiguity before it becomes litigation. The jury had to decide based on testimony alone.
For artists and managers, this outcome should clarify something important: a verbal deal works until it does not. And when it stops working, the absence of documentation puts both parties at risk — the artist of paying more than agreed, and the manager of collecting nothing at all.
Key Clauses Every Artist Management Agreement Needs
A properly drafted management agreement does not need to be hundreds of pages. It needs to cover the terms that matter most when the relationship changes — because every management relationship eventually changes. Here are the artist management agreement provisions that would have prevented the Chance-Corcoran dispute entirely.
Commission Structure and Calculation
The artist manager commission rate is the foundation of the deal. According to entertainment law practitioners, industry standard typically falls between 15% and 25% of the artist’s gross income, though the specific percentage and what income it applies to must be defined explicitly. Does it cover all income streams or only those the manager directly facilitated? Does it apply to gross or net? These distinctions in an artist management agreement can mean millions of dollars over a career.
Manager Responsibilities
There is no standard legal definition of what a music manager does. Some managers handle day-to-day business operations, touring logistics, and brand partnerships. Others focus primarily on creative direction and industry relationships. The agreement should spell out exactly what services the manager will provide, because undefined responsibilities lead to undefined expectations.
Term Length and Renewal
How long does the agreement last? Is it a fixed term with an option to renew, or does it continue indefinitely until one party terminates? Artists generally benefit from shorter initial terms that give them flexibility. Managers prefer longer terms that protect their investment of time and effort. Whatever the agreed duration, it must be documented in the artist management agreement.
Termination Provisions
How can either party end the relationship? What constitutes cause for immediate termination versus termination without cause? What notice period is required? These terms determine whether the ending is clean or contentious. In the Chance case, the lack of documented termination provisions in their artist management agreement contributed directly to the dispute.
Power of Attorney Limitations
If the manager will have authority to sign documents, approve expenditures, or make business decisions on the artist’s behalf, those powers should be explicitly limited. As SAG-AFTRA’s sample management agreement illustrates, industry-standard contracts address power of attorney as a defined, limited grant. A carefully drafted agreement grants limited power of attorney for specific, defined tasks — not a broad authorization that could be misused.
What Is a Sunset Clause and Why It Matters
The sunset clause was the central issue in the Chance the Rapper litigation. A sunset provision defines what happens to the manager’s commission after the management relationship ends. In most entertainment agreements, the manager continues to earn commissions on deals they helped create — but at a declining rate over a defined period.
A typical sunset structure might look like this: full commission rate for the first year after termination, reduced to 75% in year two, 50% in year three, and zero thereafter. This protects the manager’s investment in building the artist’s career while giving the artist a clear timeline for when post-termination obligations end.
Without a written sunset clause, both parties are guessing. The manager may believe industry custom entitles them to years of continued income. The artist may believe all obligations ended when the relationship did. As the Chance case demonstrates, a jury may not side with either interpretation — and getting to that verdict can take half a decade.
If you are negotiating an artist management agreement, the sunset clause in your artist management agreement deserves particular attention. It is the single most common source of post-termination disputes in the entertainment industry.
How Artists and Managers Can Protect Themselves
Whether you are an emerging artist signing your first artist management agreement or a seasoned manager taking on a new client, these steps will protect both sides of the relationship.
- Get it in writing from day one. Even if the relationship starts informally, formalize the terms as soon as there is real money or career momentum at stake. A signed artist management agreement at the beginning is always easier than negotiating terms after a dispute arises.
- Hire an entertainment attorney. Both parties should have independent legal counsel review the artist management agreement. The artist’s attorney should not also represent the manager. Conflicting interests require separate representation — this is non-negotiable.
- Define the commission base clearly. Specify whether the commission applies to gross income, net income, or specific income streams. The artist management agreement should account for merchandise, touring, endorsements, streaming royalties, and any other revenue category the artist may generate.
- Include a sunset clause with specific terms. Define the percentage, duration, and calculation method for post-termination commissions. Do not leave this to industry custom or verbal understanding.
- Review and update the agreement periodically. As an artist’s career grows, the management relationship evolves. Schedule regular reviews of the artist management agreement to ensure it reflects the current scope of the relationship.
The goal of a written agreement is not to signal distrust. It is to protect a relationship that both parties value by ensuring that expectations are documented, mutual, and enforceable. As this case illustrates, the absence of documentation does not prevent disputes — it guarantees them.
Frequently Asked Questions
Is a handshake deal legally binding in the music industry?
Yes, verbal agreements are generally enforceable in most states. However, proving the specific terms of a verbal deal in court is extremely difficult and expensive. A written artist management agreement provides clear, provable terms that protect both the artist and the manager.
What percentage does a music manager typically earn?
Artist manager commissions typically range from 15% to 25% of the artist’s income. The exact percentage, and whether it applies to gross or net income, should be clearly defined in the management agreement. Higher-profile artists may negotiate lower percentages as their earning potential increases.
What is a sunset clause in a management contract?
A sunset clause defines the manager’s right to continue earning commissions after the management relationship ends. Typically, the commission rate decreases over a set period — for example, full rate in year one, 75% in year two, and 50% in year three. Without a written sunset clause, post-termination compensation is the most common source of disputes between artists and managers.
Do I need an entertainment attorney to review my management agreement?
Absolutely. Both the artist and the manager should have independent legal counsel review any management agreement before signing. An experienced entertainment attorney can identify unfavorable terms, negotiate better provisions, and ensure the agreement complies with applicable state law.
Next Steps
The Chance the Rapper verdict is a reminder that even the most successful business relationships can unravel without documentation. Whether you are an artist entering a management relationship, a manager formalizing a new client arrangement, or a business professional operating on a handshake, the time to formalize your artist management agreement is before a dispute arises — not after.
Howard East represents artists, managers, and entertainment professionals in contract negotiations, agreement drafting, and business disputes. Schedule a consultation to discuss your management agreement or entertainment law needs.
Attorney Advertising. This content is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this article. The outcome of every case depends on its specific facts and circumstances.
