Category: Ethics and Conduct

Fair Dealing

Also known as: Fair Dealing Exception

Simply put

Fair dealing is a provision in copyright law that lets people use portions of a copyright-protected work in certain circumstances without first getting permission from, or paying, the copyright owner. It functions as a limited exception to the exclusive rights that copyright normally gives to a work's author. What counts as fair dealing depends on the law of the specific country, and it does not permit unlimited use.

Formal definition

Fair dealing is a statutory limitation and exception to the exclusive rights conferred on a copyright owner, recognized in a user's-rights framing under the copyright regimes of jurisdictions such as the United Kingdom, Canada, and Australia (for example, under the Copyright Act 1968 (Cth) in Australia). It permits lawful dealing with a protected work for defined purposes without the owner's authorization or remuneration, and serves to balance the exclusive rights of copyright owners against the interests of users. Whether a particular use qualifies is a fact-specific determination that turns on the enumerated permitted purposes and applicable fairness criteria in the relevant jurisdiction's legislation and case law; the doctrine is distinct from the United States 'fair use' standard and from any unrelated business-ethics or contractual notion of dealing fairly. This entry is educational and not legal advice.

Why it matters

Fair dealing determines whether a particular use of copyright-protected material is lawful or infringing. Because copyright confers exclusive rights on the author of a creative work, any reproduction, distribution, or other dealing with that work ordinarily requires the owner's permission. Fair dealing carves out a limited set of circumstances in which portions of a work may be used without first seeking permission from, or paying, the copyright owner. For organizations that create, reproduce, or distribute content, understanding where this line falls is central to avoiding infringement liability.

The doctrine reflects a deliberate policy balance: it weighs the exclusive rights of copyright owners against the interests of users in accessing and using protected works. Getting that balance wrong in either direction carries consequences. Over-reliance on fair dealing can expose an entity to infringement claims where a use falls outside the permitted purposes or fails the applicable fairness criteria; overly cautious avoidance of the exception may forgo uses the law legitimately allows. Because whether a use qualifies is a fact-specific determination, the analysis rarely produces a bright-line answer.

Critically, fair dealing is a jurisdiction-specific concept. It is recognized under the copyright regimes of jurisdictions such as the United Kingdom, Canada, and Australia, and is distinct from the United States 'fair use' standard. The permitted purposes, tests, and outcomes differ across these regimes and turn on both legislation and case law, so a use lawful in one country may not be lawful in another. This entry is educational and not legal advice; specific uses should be assessed against the applicable jurisdiction's law and the particular facts.

Who it's relevant to

General Counsel and Legal Teams

Legal advisors assess whether a proposed use of copyright material falls within a fair dealing exception in the applicable jurisdiction. Because qualification is fact-specific and varies by country, counsel typically evaluate the permitted purpose and fairness criteria against the relevant legislation and case law rather than applying a single universal test.

Content Creators, Publishers, and Communications Teams

Those who reproduce, quote, or distribute third-party works need to understand where fair dealing may permit use without permission and where it does not. Misjudging the limits of the exception can expose the organization to infringement claims, so uncertain uses generally warrant legal review or a permission-based approach.

Compliance and Risk Functions

Teams responsible for managing intellectual property and infringement risk may build fair dealing considerations into content-review processes. Because the doctrine differs across jurisdictions such as the UK, Canada, and Australia, and differs from the US fair use standard, organizations operating across borders should account for jurisdiction-specific requirements rather than a single global rule.

Educational and Research Institutions

Universities, libraries, and researchers frequently rely on fair dealing when using protected works for permitted purposes recognized under their jurisdiction's copyright law. Institutional copyright offices commonly provide guidance on how the applicable exceptions apply to teaching, study, and research within the limits set by local legislation.

Inside Fair Dealing

Honest and Good-Faith Conduct

A general expectation, reflected in many codes of conduct and ethics policies, that individuals acting for the organization deal honestly, avoid deception, and do not take unfair advantage of others through manipulation, concealment, or abuse of privileged information. This is typically a principles-based conduct standard rather than a single statutory rule.

Implied Covenant of Good Faith and Fair Dealing (Contract Context)

In many common-law jurisdictions, contracts are read to include an implied duty that parties will not act to deprive one another of the benefit of the bargain. The precise existence, scope, and enforceability of this covenant vary by jurisdiction and contract type, and it is a matter for legal counsel to assess on specific facts.

Equitable Treatment of Stakeholders

The idea, echoed in voluntary governance frameworks and corporate codes, that comparable stakeholders (for example, shareholders of the same class) should be treated fairly and consistently. Whether and how this is binding depends on applicable company law, listing rules, and the framework or code an entity has adopted.

Conflict-of-Interest and Self-Dealing Controls

Policies and procedures designed to prevent representatives from favoring their own interests over those of the counterparty or the company. These are typically owned and operated by management as first-line controls, with oversight by the board or a relevant committee.

Accountability and Assurance

Fair dealing expectations are generally set in codes of conduct owned by management, monitored by the compliance function, and subject to independent assurance from internal audit, with board or committee oversight of the overall conduct and ethics program. The specific allocation depends on the organization's governance structure.

Common questions

Answers to the questions practitioners most commonly ask about Fair Dealing.

Is 'fair dealing' in the corporate governance and conduct context the same as the copyright 'fair dealing' exception?

No. In this glossary, fair dealing refers to a business-conduct and ethics concept: the expectation that a company and its personnel treat customers, suppliers, competitors, and other stakeholders honestly and equitably. It is unrelated to the copyright-law doctrine of 'fair dealing,' which is a statutory exception permitting limited use of copyrighted works in certain jurisdictions. Those are distinct doctrines that happen to share a label; the copyright exception is out of scope for this entry.

Does fair dealing mean the same thing as the contract-law duty of good faith and fair dealing?

Not exactly. The implied covenant of good faith and fair dealing is a legal doctrine, recognized in many jurisdictions, that governs how parties perform contractual obligations. Fair dealing as a conduct and ethics principle is broader and often voluntary, appearing in codes of conduct and ethics programs to describe expected behavior toward stakeholders generally, not only contract counterparties. The scope, enforceability, and consequences differ, and the contract-law covenant varies by jurisdiction. This entry addresses the conduct principle; specific contract-law questions depend on the governing law and should be assessed with legal counsel.

Which function typically owns fair dealing expectations within an organization?

Ownership is generally shared. Management is typically accountable for embedding fair dealing standards into day-to-day operations, sales practices, and business processes as part of the first line. The compliance function commonly sets policy, provides training, and monitors adherence as part of the second line, while internal audit may provide independent assurance over the design and operating effectiveness of related controls as part of the third line. The board or a relevant committee generally provides oversight of the ethics program rather than executing it. Exact allocation depends on the entity's structure, sector, and size.

How might fair dealing expectations be documented in policy?

Fair dealing principles are frequently articulated in a code of conduct or code of ethics, sometimes supported by more detailed standards on topics such as honest marketing, conflicts of interest, and treatment of counterparties. Whether any element is a binding requirement or a voluntary standard depends on applicable law, listing rules, sector regulation, and the entity's own commitments. Organizations typically distinguish, within the documentation, which provisions reflect legal obligations and which reflect aspirational or best-practice expectations, since this affects escalation and enforcement.

How can an organization monitor whether fair dealing standards are being followed?

Monitoring approaches generally include reviewing customer and counterparty complaints, testing sales and marketing practices, analyzing whistleblower or speak-up reports, and conducting periodic conduct risk assessments. When distinguishing effectiveness, it is useful to separate control design from operating effectiveness: a policy may be well designed yet inconsistently applied in practice. The appropriate mix of monitoring activities depends on the organization's risk profile, sector, and jurisdiction, and results are typically reported through compliance and, where warranted, to the board or a committee.

How does fair dealing relate to conduct risk and risk appetite?

Fair dealing failures can be a source of conduct risk, potentially leading to reputational, legal, or regulatory consequences. Many organizations articulate their tolerance for such risk within a broader risk appetite framework, then set more specific tolerances for particular behaviors or business lines. It is important to distinguish appetite from tolerance and from capacity, and to recognize that quantifying conduct risk is often qualitative and judgment-based. This entry is educational and does not constitute legal, audit, or compliance advice; treatment should be tailored to the entity's facts and jurisdiction.

Common misconceptions

'Fair dealing' in a corporate code means the same thing as the copyright exception of the same name.

These are unrelated concepts. The copyright doctrine is a statutory exception permitting limited use of protected works and is outside the scope of this entry. In the governance and conduct context, fair dealing refers to honest, good-faith treatment of stakeholders and counterparties.

Fair dealing is a single, uniform legal requirement that applies identically everywhere.

Fair dealing is expressed variously as a principles-based conduct standard in voluntary codes, an implied contractual covenant in some jurisdictions, or elements embedded in specific statutes and rules. Its binding force, scope, and enforceability vary by jurisdiction, sector, entity type, and facts, and should be assessed with counsel.

Ensuring fair dealing is primarily the board's operational responsibility.

Setting, implementing, and operating fair-dealing controls is generally a management responsibility (first line), monitored by compliance (second line) and tested by internal audit (third line). The board and its committees typically provide oversight of the conduct program rather than executing day-to-day controls.

Best practices

Define fair dealing clearly within the code of conduct in the governance/ethics sense, and avoid confusing it with unrelated concepts such as the copyright exception, so employees and counterparties understand the standard being applied.

Assign clear ownership: have management design and operate fair-dealing controls, compliance monitor adherence, internal audit provide independent assurance, and the board or relevant committee oversee the program.

Confirm with legal counsel how fair dealing obligations apply in the relevant jurisdictions and contract types, recognizing that any implied covenant of good faith and fair dealing and its enforceability differ across legal systems.

Embed conflict-of-interest and self-dealing controls, such as disclosure requirements, approval workflows, and recusal procedures, to operationalize the fair-dealing standard rather than leaving it as an abstract aspiration.

Provide targeted training and clear escalation and reporting channels so that individuals can recognize and raise potential fair-dealing concerns before they crystallize into disputes or misconduct.

Periodically review both control design and operating effectiveness of fair-dealing controls, and calibrate expectations to the entity's sector, size, and applicable frameworks rather than assuming a one-size-fits-all requirement.