Legal Definitions - fair dealing

The term "fair dealing" has two distinct meanings in law, depending on the jurisdiction and context.

In the United States, "fair dealing" primarily refers to the principle that individuals in positions of trust or authority, such as corporate officers, directors, or fiduciaries (like trustees or agents), must act with complete honesty, transparency, and full disclosure when conducting business. This is especially critical in situations where there is a potential for personal benefit or a conflict of interest. It requires them to provide all relevant and material information to those whose interests they represent, ensuring that decisions are made on an informed basis and that the interests of the organization or beneficiaries are protected and prioritized.

• Example 1: A Corporate Director's Property Sale
  Imagine a director on the board of a technology company who also owns a commercial building. The company decides it needs a new headquarters and the director offers to sell their building to the company. To ensure "fair dealing," the director must fully disclose their ownership of the building to the entire board. They should also provide an independent appraisal of the property's market value, recuse themselves from any board discussions or votes related to the purchase, and ensure that the transaction is approved by disinterested directors at a price that is fair to the corporation.

  Explanation: This example illustrates fair dealing because the director, despite having a personal financial interest, acts transparently by disclosing the conflict and taking steps (like recusal and independent valuation) to ensure the company's interests are protected and the transaction is equitable.

• Example 2: A Financial Advisor's Investment Recommendation
  A financial advisor manages a client's investment portfolio. The advisor also has a significant ownership stake in a particular mutual fund. If the advisor recommends that their client invest heavily in this specific mutual fund, "fair dealing" requires them to clearly disclose their personal ownership interest in the fund to the client. They must explain any potential benefits they might receive from the client's investment and demonstrate that the recommendation is genuinely in the client's best financial interest, not primarily to benefit the advisor's own holdings.

  Explanation: Here, the financial advisor, acting as a fiduciary, demonstrates fair dealing by being transparent about a potential conflict of interest and ensuring the client has all necessary information to make an informed decision, prioritizing the client's welfare.

Separately, in Canadian copyright law, "fair dealing" is a specific legal provision that permits the use of copyrighted works without needing permission from the copyright holder. This is allowed only if the use falls within certain categories—such as research, private study, criticism, review, news reporting, education, parody, or satire—and is determined to be "fair" based on a set of factors considered by the courts.

• Example 3: A Blogger Reviewing a New Book
  A blogger writes a review of a recently published novel. In their review, they quote a few short passages from the book to illustrate their points about the author's writing style and plot development. They properly attribute the quotes to the author and the book.

  Explanation: This scenario would likely fall under "fair dealing" in Canadian copyright law, specifically for the purpose of "criticism" or "review." The limited use of excerpts, coupled with proper attribution and the analytical nature of the review, would generally be considered fair, meaning the blogger would not need to seek permission from the book's publisher or author to include the quotes.