The actress is being taken to court by publishing company HarperCollins, who alleges she signed a book deal with them in 2014, but never delivered the manuscript that was part of their contract.
In court documents obtained by TMZ, HarperCollins claims they paid Lohan a $365,000 advance against future royalties for the book, which her production company promised would be completed by May 2015.
HarperCollins alleges the deadlines came and went with Lohan not submitting any manuscripts to the publishing house, who eventually informed her in September 2018 that the book deal was off.
The publishers insist they asked Lohan for the money back due to the breach of contract, but they claim the 34-year-old actress refused to comply.
According to TMZ, HarperCollins is now suing Lohan for the $365,000 plus interest and legal fees.
The news comes on the same day that Lohan announced she is launching a new business venture in the United Arab Emirates, where she has lived for the past six years.
She wrote on Instagram: "So excited to set up my own company in the UAE! My journey continues in this incredible country! Thanks to @virtuzone for making my company setup process so smooth. If you are interested in setting up your own company here in the UAE, and looking to #BeYourOwnBoss then I recommend you get in touch with these guys."
Lindsay moved to Dubai in 2014 and travels between the Middle East and her family home in New York, but hasn't been back to her old home in Los Angeles in 10 years after the paparazzi scared her off.