The singer signed a USD 4.5 million deal with the Jemella Group - the firm behind the brand - in 2011, starring in a series of adverts to promote ghd.
She is now threatening to sue the company, claiming it owes her USD 2 million based on an oral agreement to extend the two-year contract, reported TMZ Online.
Jemella says there was no agreement, explaining that it decided against renewing the endorsement deal after market research suggested Perry's popularity in Europe had declined.
"They're backing out of the deal because of an ownership change, and just throwing shade to hide their bad faith. Jemella's attempt to embarrass Ms Perry by including defamatory statements about her in a public filing is shameful," Perry's representative said.