Contract Work Advice - Legal Stuff?

Hi all,
Wanted to get your input on a project that I might take up as its a bit new territory for me.  The design isn't really of concern, the project itself won't be difficult...I'm more concerned with the "business" side of it.
A coworker of mine (non-software guy) has a "friend" who is looking for a developer to create a GUI for him and his franchaise diner.  I'm not entirely sure of why, but the friend some time ago had a buddy of his create the point of sale (POS) running on their computer in VB.  I suppose this guy is no longer doing contract or for some reason can't be reached.  He gave me a bunch of image captures of the POS in action, and he wants me to recreate it.  It doesn't look difficult at all from what he has given me.  I am going to have lots of questions for him right now its one of those "Hey, I hear you could do something like this...are you interested?  Take a quick peek and see if you want more details sort of thing"
Looking at it quickly, I am able to do what he is asking.  (Pending 1-2 issues dealing with magnetic card swipes if he wants that)  So my question to you is....do you have any advice for freelance work?  I'm a bit confused myself as to why if he owns a franchise - and why he even needs someone outside to provide this to him (I would assume when you buy the franchaise the software is given to you!)  I'm not sure thats any of my business though as the contractor?  I'm not sure what to do, I do not know this person so its not "under the table work"...does a contract and the whole 9 yards have to be done?
My company pays me to do labview and a whole heck of a lot of other engineering duties....this would be something on the side - but as you can see I'm so new to "freelance" I don't even know the questions to ask...and I'm afraid if I don't there could be legal issues?
Thanks for any advice!
LV7.1, LV8.5

A coworker of mine (non-software guy) has a "friend" who is looking for a developer to create a GUI for him and his franchaise diner.  I'm not entirely sure of why, but the friend some time ago had a buddy of his create the point of sale (POS) running on their computer in VB.  I suppose this guy is no longer doing contract or for some reason can't be reached.  He gave me a bunch of image captures of the POS in action, and he wants me to recreate it.  It doesn't look difficult at all from what he has given me. 
Speaking as an ex-free-lancer who has been "stiffed".
A POS app is NOT trivial when you take into concideration taxes, network-outages, payment types ...
Clearly define what you are going to do and what you aren't way before you start talking money. And unless you have a lot of spare time to kill, don't let yourself agree to fixed price were the customer decides if the work is completed.
Almost a third of our company is involved in getting all of those details worked out before anyone "drops a node".
Coding is the "easy part".
Ben
Ben Rayner
I am currently active on.. MainStream Preppers
Rayner's Ridge is under construction

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