In March 2026, Chance the Rapper entered a courtroom to settle a multi-million pound dispute with his former manager over a handshake deal gone wrong. The core issue was not trust or intent. It was a single missing clause that most independent artists have never heard of until it costs them years of income they thought they no longer owed.

The sunset clause: the contract term most artists discover too late

In March 2026, Chance the Rapper's legal battle with former manager Pat Corcoran went public. The dispute centers on a handshake deal and unclear post-termination commission rights. What started as trust between two professionals became a multi-million pound courtroom argument about who owes what, for how long, and on which deals.

This is not about bad management. This is about a structural gap in most independent artist contracts: the sunset clause. Most artists have never heard of it until they are already stuck in it.

Why this matters now

Management disputes are rising because independent artist revenue is rising. Independent artists retained 80% more direct-to-fan revenue in 2026 compared to 2020, according to Troy Like. When artists control more income, the financial stakes of management commission structures increase accordingly.

The pattern repeats: an early-career deal gets made informally (no written contract, or a contract without clear exit terms), the artist grows, the relationship ends, and the manager continues to collect commission on deals originated during the management term. Sometimes for years.

The ISM updated its management contract guidance in May 2026, noting explicitly that "there is no such thing as a standard contract" and urging independent artists to seek legal review before signing. Most do not.

What a sunset clause actually does

A sunset clause defines your manager's commission rights after the contract ends. It does not eliminate post-term commissions. It structures how they diminish over time.

A standard structure:

• Full commission (e.g. 20%) for 12 months post-termination on qualifying deals
• 50% (e.g. 10%) for year two
• 25% (e.g. 5%) for year three
• Zero thereafter

Which deals qualify for post-term commission?

Any deal "substantially negotiated" during the management term typically qualifies. This includes:

• Record deals
• Publishing agreements
• Touring contracts
• Brand partnerships
• Licensing deals

If a deal was in motion when the management relationship ended, your manager may have a legal claim to commission on it.

What happens without a sunset clause?

Without one, courts apply standard commercial principles or industry customs. Neither are predictable. The dispute becomes entirely dependent on verbal evidence, text messages, and email trails. This is how Chance the Rapper's situation became a trial.

The three levers in a well-drafted sunset clause

1. Definition of "substantially negotiated": This phrase is where disputes originate. Narrow it as tightly as possible. The clause should specify that only deals signed and generating income during the term qualify for post-term commission.

1. Which revenue streams are included: Are touring, merchandise, and brand income included? Is commission calculated on gross or net income? Define this explicitly.

1. Duration and reduction schedule: A three-year sunset with descending percentages is standard. Anything longer should be questioned.

Who needs to read this twice

This is especially critical if:

• You have had an informal management arrangement (even a friend or mentor in the role) and are now formalising or transitioning to a new manager
• You are signing your first formal management agreement and the contract presented is your manager's boilerplate, not a negotiated document
• You have experienced meaningful commercial growth since the original deal was made. The greater the income, the higher the post-term commission exposure.

This is not about distrusting your manager. It is about ensuring both parties have identical written understanding of the terms from day one, so the relationship can end cleanly if it needs to.

What to do right now

1. Audit your current arrangement

Do you have a signed management agreement? If not, document the current commission rate, deal scope, and expected term in a letter of agreement. Even if both parties sign it informally today, it matters.

2. Demand a sunset clause in any new agreement

If you are being presented with a management contract without a sunset clause, add one before signing. The standard structure is: full rate for year one post-term, 50% year two, 25% year three, zero after.

3. Define "substantially negotiated" precisely

Get legal drafting on this. Vague language here is where disputes originate. The clause should specify that only deals signed and generating income during the term qualify.

4. Separate touring commissions from recorded music commissions

Many disputes arise from touring income post-contract. Some managers legitimately deserve commission on a tour routed during their tenure. Others do not. Define which income streams survive the term and which do not.

5. Build a deal log

Track every revenue-generating deal or conversation your manager conducts on your behalf. This is your evidence base if a dispute ever arises. Documentation is not paranoia. It is operational hygiene.

6. Review the agreement before it expires, not after

Re-evaluate commission structures at each contract renewal. What was fair at 5% market share may not be fair at 25%.

The gap between belief and reality

The Chance the Rapper trial is not a story about one bad decision. It is a story about the gap between the artist's mental model of their business and the legal reality of it.

The artist believed the deal ended when the relationship did. The manager believed, and may be legally correct, that the deal continues to generate obligations years later.

A CEO does not operate on that ambiguity. Every revenue stream, every partner, every relationship is documented. Not because trust is absent, but because documentation is how trust scales.

When you manage your contracts the way you manage your art, you control the outcome of your own career. The moment you outsource that understanding is the moment someone else's interpretation of a handshake becomes your liability.

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Track every deal, protect every agreement. Music Artist Manager's contracts and deal pipeline features let you log active agreements, flag renewal dates, and keep your full revenue picture in one place so you always know what you have signed and what it means.

[Explore MAM Contracts & Deal Management →]

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