as legality goes, even half a napkin with the words "joe shmoe pay $200 to john doe for character images" will hold up in court as long as it is signed by both parties.
if these are truly original works he can't be in legal danger and neither can you. He is completely responsible for the money he owes you and if it is over a grand i would pursue legal actions. anything less though and it may not be worth the trouble.
ways to avoid this :
avoid unknown quantities:
set a fixed price well before you begin as well as a payment method and avoid hourly rates because even logged hours are easy to challenge.
don't work for no-names unless you know them in person - work for a larger company
save records of every conversation, ideally ones easy to prove are real (written signatures - no electronic deals unless it's a huge company)
nag like a bitch
still, at times there's nothing you can do. freelancing (and self-employment in general) is synonymous with getting stiffed on a few jobs.
the only party that ever neglected to pay me for services was JAMDAT mobile, now a part of EA. EA refuses to pick up the bill for the JAMDAT work
but they are paying me handsomely for work I did them this weekend
.
