Explained: All about $30M McLaren lawsuit involving IndyCar Champion Alex Palou

McLaren's IndyCar division has been in legal trouble with one of the sport's best drivers of the current era, Alex Palou. He had earlier signed a contract with the team for the future; however, he later announced that he would not be moving to the team.

Alex Palou is one of the most competitive drivers in IndyCar currently. Driving for Chip Ganassi Racing, he was offered a contract from McLaren in 2022, under which he would drive for them in the future. He agreed; however, Chip Ganassi Racing argued that they had him on an option contract for the next season and that he would continue racing for them in 2023.

Palou, as per the agreement, continued driving for CGR in the 2023 season, while serving his duties as a test and reserve driver for McL. However, in August of that year, he informed McLaren's management that he would not be abiding by the contract and would not drive for them in the 2024 season, as previously mentioned.

This led to a huge tussle between the team and Alex Palou. Weeks later, in September, the team filed a lawsuit against him for alleged breach of contract, demanding $30 million in damages.

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Why has McLaren demanded $30 million in lawsuit against Alex Palou?

While Palou did continue driving for Chip Ganassi Racing in the 2023 season, he served his role as a test/reserve driver for McLaren. The team also claimed that they spent money on sponsors who were coming through Palou. Moreover, there were expenses for his simulator training, testing in Formula 1 cars, etc.

These expenses were part of the $30 million that the team wants to claim in damages. At the same time, however, it is essential to note that Palou acknowledges his actions constitute a breach of contract, but claims that the deal was insignificant and the team suffered no major losses.

At the same time, there was a question of the team's F1 seat. However, McLaren Racing CEO Zak Brown recently cleared up that Alex Palou was more of a backup option if Oscar Piastri had failed to perform competitively in the 2023 season.

"I never strung along Alex," Brown said. "I never told him he would be under consideration for 2023[...]there was some optionality to join F1," Brown said.

The lawsuit has been filed in the UK Commercial Court in London, and Zak Brown has been called as a witness for the hearing. The trial is expected to wrap up later this year.