Are you absolutely certain of that?
I'm not an attorney myself (nor am I trying to be flippant or argumentative), but it seems the combination of verbal contract, his continuing to do the work specified by his roommate, and his acceptance of payment may create problems for the O.P.
Lawyers are assholes - DON'T let him bully you into signing anything.
Very true: standard legal M.O. on the first contract document is to try to get away with anything.
I.e., they will expect you to push back and remove some terms (and if you don't, that's a bonus win for them).