How binding is an oral contract among friends under home-based business?

My husband made an oral agreement with a friend to transform his garage into a work space, in two days time. While my husband is fully licensed and insured in NYS to operate his own construction firm, since June of this year, he was taken for a ride by a former friend, after charging a fifth of what any other contractor would charge. If payment is not received, does oral agreement stand firm? If not paid by the employer in several weeks time, can the contractor apply late fees and finance charges under Tioga County laws? Can I, as his wife, who is also covered under his insurance policy, appoint myself with my husband's permission, as personal asistant/secretary for his business? Someone please help as we are proceeding to small claims court and need some answers!