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A lawsuit involving Chance the Rapper and his former manager, Pat Corcoran, highlights a costly lesson for businesses, creatives, and entrepreneurs alike: handshake deals can lead to million-dollar disputes.
The legal battle centers on Corcoran’s claim that he is owed roughly $3 million in unpaid commissions after being terminated as the rapper’s manager in 2020. The dispute stems from an alleged sunset clause that Corcoran says entitled him to continue receiving royalties for three years after their working relationship ended.
However, according to testimony in Cook County Circuit Court at the Richard J. Daley Center, the partnership operated largely without a written contract. Instead, the relationship developed through informal agreements and mutual trust over the years as the artist’s career grew.
When Business Relationships Grow Without Contracts
Situations like this are not limited to the entertainment industry. Many partnerships begin informally. Friends start businesses together. Early collaborators agree to split revenue. Managers and creators work on trust while a project gains momentum.
At the beginning, a written contract may feel unnecessary. The parties know each other and share the same goals. As the business grows, however, money, ownership interests, and expectations become more complex. Without a written agreement, the parties may later discover that they never had the same understanding of their arrangement.
When disputes arise, courts must determine what the parties intended based on testimony and surrounding facts. That process can be uncertain and expensive.
Why Written Agreements Matter
A written contract provides clarity. It creates a record of what each party agreed to and what each party is expected to do. Clear terms can reduce misunderstandings and give both sides guidance if the relationship changes.
When agreements are not written down, basic questions may become the subject of litigation. How much compensation was promised? How long the relationship was expected to last. What happens when the parties decide to part ways?
These issues are easier to resolve when the agreement is documented at the start.
Key Terms That Should Be in Writing
A well-drafted agreement should address several core issues. Compensation terms should be defined clearly. The contract should explain how payments are calculated, when they are due, and what percentage or fee applies.
Termination provisions are also important. The agreement should explain how either party can end the relationship and what obligations continue after termination.
If the parties expect payments to continue after the relationship ends, those terms should be stated directly. Provisions such as post termination commissions or sunset clauses are common in management agreements, but they must be defined clearly to avoid disputes. The contract should also outline the roles and responsibilities of each party. When expectations are clear, it becomes easier to determine whether those obligations were met.
The Takeaway
The dispute between Chance the Rapper and his former manager illustrates how a successful partnership can lead to litigation when key terms were never written down.
Putting agreements in writing does not signal distrust. It protects both sides and provides a shared understanding of the relationship. For businesses, creators, and entrepreneurs alike, taking the time to document the deal at the beginning can prevent costly disputes later.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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