I think your guts are telling you something here.
Listen to the people who are saying that his techniques may cause problems further down the line. What you need to watch out for is that he doesn’t handover SEO to you and take off before that happens – you don’t want to be left holding the bag when the boss notices results tank. Especially because it sounds like your boss won’t understand the true reasons.
Your boss might not know anything about SEO, but surely he’d be able to understand that giving someone a 5% commission on website purchases (and I’m guessing this is regardless of acquisition?) without a contract is a recipe for disaster.
My guess is your best chance would be to help your boss see that, without directly putting yourself between these two people.