A jury trial has begun on Chancelor Bennett AKA Chance the Rapper’s lawsuit against his former manager, Pat “The Manager” Corcoran. The main issue is whether or not an oral management agreement, which allegedly provides for a three year “sunset” clause on Corcoran’s commissions, is enforceable. Corcoran managed Chance from 2012 to 2020.
By way of background, personal management contracts do not have to be in writing. They can be oral but, of course, the terms thereof would be harder to prove. It is usually more beneficial for the manager to have the agreement in writing as he or she is the one who will seek to enforce a right to commissions; however, both parties may benefit in that a written management agreement may clear up misunderstandings.
Most personal managers work on a commission basis in the music business, typically earning 15-20 percent commission on an artist’s earnings. A typical sunset clause in a management contract provides that the manager’s right to earn commissions does not end when the term of the agreement ends; it continues. For instance, a management agreement might provide for a four-year term with a “sunset” clause that provides that after the four years, the manager will continue to earn commissions. An example would be the first year after the contract ends, the manager will receive 100 percent of his commissions, 50 percent for the second year, and 25 percent for the third year.
In the lawsuit, Chance also alleges Corcoran failed to perform his management duties which damaged Chance’s career.
Sunset clauses are particularly important when a manager is representing a new artist who has very little or no income from music. A manager invests his time and efforts to breaking a new artist and does not want to get kicked to the curb as soon as the artist’s career starts taking off and the money starts rolling in. A sunset clause can help the manager in such circumstances.
Chance is best known for becoming a successful independent artist without being signed to a major label. Chance and Corcoran worked on very successful mixtapes such as Coloring Book and Acid Rain. In 2017, Coloring Book became the first non-physical album (it was only available on streaming platforms) to win a GRAMMY, which set off Chance’s musical career.
Corcoran stopped managing Chance in 2020 and they have been fighting in litigation with each other ever since. Chance claims there was no sunset clause as part of their oral management agreement. Corcoran alleges he is entitled to $3.8 million in commissions.
The dispute started in 2020 when Corcoran sued Chance’s companies for unpaid commissions of 15 percent amongst other claims. In 2021, Chance countersued claiming breach of fiduciary duty and interfering with his business opportunities. In 2012, the judge dismissed most of Corcoran’s claims but let the unpaid sunset commission claim go forward. Now it will be up to the jury to decide.
GLENN T. LITWAK is a veteran entertainment attorney based in Santa Monica, CA. He has represented platinum selling recording artists, GRAMMY-winning music producers, hit songwriters, management and production companies, music publishers and independent record labels. Litwak is also a frequent speaker at music industry conferences around the country, such as South by Southwest and the Billboard Music in Film and TV Conference. Litwak has been selected as a “Super Lawyer” by Super Lawyer magazine for 2022-2025. Email Litwak at gtllaw59@gmail.com or visit glennlitwak.com.
This article is a very brief overview of the subject matter and does not constitute legal advice.
