While the saying is “It’s just business.”, that is bullshit. Business is built on relationships, and that is personal. The two cannot be separated.
That said, in hindsight, a written agreement should have been drawn, clearly established roles/responsibilities/deliverables/cost/timing. Period. While you “should” have recommended that step to your friend and your boss, ultimately, it was their responsibility, not yours.
And again, if they are jackasses and see it as your responsibility, I’d get out of that relationship.
Edit: Unless you were assigned to manage the project, then it was your responsibility. If that is the case and I was your boss, we’d have a very serious discussion.