enigma1 - 5:33 pm on Aug 9, 2010 (gmt 0)
Then he placed hidden links on these pages pointing them to our main domain, knowing full well this is against Google webmaster guidelines.
It would hurt his own site not yours. But check to what sites your site is linking to. If the other party used some social eng, and you accepted him as a link partner and placed a link inside your site then it could hurt you because google may find traces of outgoing links.