A company based in Beverly Hills said it signed a contract with her to promote its extensions and alleges that she breached the agreement by using fake blonde locks produced by a rival.
Hairtech International also claims Miss Hilton’s highly publicised party lifestyle, and what it calls her “public debauchery”, was contrary to their agreement, and is seeking damages of 10 times what she was paid under the contract.
The company claims she has been paid $3.5 million (£2.2 million) since agreeing to become spokeswoman for the company’s Dream Catcher line of hair extensions in 2007.
According to the claim, filed in Los Angeles Superior Court, Miss Hilton, 29, was seen wearing other extensions in magazine photographs and on television.
The company claims she also missed a launch party for the hair extension line in 2007 because she was serving a jail term for driving offences, violating a clause in her contract that she would “obey the law.” More than 600 “hair extension professionals” had been due to attend the event and Hairtech lost $6.6 million (£4 million) on the launch party alone, it claimed.
The suit also stated that she had “repeatedly engaged in various improper activities” in public that were contrary to the agreed marketing campaign.
Miss Hilton, 29, the great-granddaughter of hotelier Conrad Hilton, has not commented.