Chicago-born rapper and hip-hop artist Chancelor Bennett, better known as Chance the Rapper, recently prevailed in a dispute brought by his former manager, Pat Corcoran, related to claims of unpaid commissions. The case highlighted the critical need for those in the music industry to rely on written contracts rather than on oral or “handshake” agreements.
Chance the Rapper rose to hip-hop stardom in the mid-2010s while flouting industry norms and remaining an independent artist, unsigned with a record label. He has achieved both critical and commercial success with his music and has collaborated with some of the biggest artists in hip-hop and R&B. His third mixtape, Coloring Book (2016), became the first album to chart on the Billboard 200 based solely on streaming, hitting Number 8. Chance went on to be nominated for 9 Grammy Awards and to win three of those.
Corcoran served as Chance’s manager from 2012-2020 during his meteoric rise to stardom as an independent artist. During their professional relationship, Chance and Corcoran had an oral agreement that Corcoran would receive 15% of the net profits from all sources related to Chance the Rapper’s music.
However, after Chance’s first studio album, The Big Day (2019), underperformed upon its release, Chance fired Corcoran in April of 2020. After being let go, Corcoran subsequently filed a suit claiming that Chance owed him $3.8 million in unpaid commissions.
Corcoran’s suit argued that the oral agreement between himself and Chance was tantamount to a contract and that Chance was contractually obligated to pay both the unpaid commission amount, as well as any commissions that become due and payable in the next three years—a sunset clause that is often “standard industry practice.”
However, this agreement and the aforementioned sunset clause were never written down. Chance acknowledged that the 15% arrangement existed but claimed that he had paid Corcoran all he was due under that arrangement. Chance argued that he had never agreed to continue paying Corcoran after their professional relationship ended and that there was no sunset clause. Chance argued that the pair had “an at-will agreement that didn’t address termination.”
On March 20th, after a two-week trial in the Cook County Circuit Court, a jury determined that Corcoran had failed to prove that a contract had existed between himself and Chance the Rapper. Indeed, there was no written documentation of the sunset agreement that Corcoran referred to. Contemporaneously, Chance’s team sought $1 million in damages in a countersuit against Corcoran claiming breach of fiduciary duty and tortious interference. The jury awarded Chance a nominal $35 in damages.
Regarding one of the biggest takeaways from this trial, one of the attorneys for Corcoran said in a statement given after the verdict: “…the message to music managers is clear: Get it in writing.”
While contracts between artists and music managers should be tailored to the specific individuals, these contracts should be written down and should generally include the following information:
Specifying the terms above in contracts between artists and managers—in writing—can help protect both parties and avoid costly litigation pertaining to disputed contract terms.
It’s also worth noting that certain contracts are subject to the legal doctrine of the “Statute of Frauds,” which requires certain types of contracts to be in writing and signed by the parties in order to be valid. The Statue of Frauds includes contracts that are not fully performable within a year (with certain exceptions). Consulting with trusted counsel prior to drafting or entering into a contract can help you determine what terms and laws will be most applicable.
If you have any further questions regarding contracts in the music industry, please contact Ross Charap.
Ross J. Charap