In this context, 'fair' means 'reasonable'. We use this set phrase to show that we accept a certain situation or view. If you say 'That's fair enough', you mean 'OK' or 'That's acceptable.'

The meaning is close to "Okay", "Fine", or similar. It has a negative connotation: the speaker did/does not agree/understand, but acknowledges the message. A: "You need to take out the trash" B: "Why?" A: "If you don't, the room will smell bad" B: (I don't want to, but I will) "Fair enough" A: "I know you've been waiting a long time, but we're very busy so you will have to wait longer" B: (I'm not happy with waiting, but I have no choice) "Fair enough"

It can mean a couple of things: Within a debate or argument, it means that the speaker is conceding the validity of a given point, that the point is reasonable (fair) enough to not warrant arguing against. In most other contexts, it is usually a statement made to show that the speaker views some act, circumstance or comment as being just and equitable (fair) In a far less common context, the word fair means pale... this context is very specific, and would likely be found only in literature of previous centuries: "His skin was fair enough, that he could walk the streets without being instantly identified as a runaway slave."

"Fair" can mean "equitable." A 200-pound boxer fighting a 140-pound boxer is not a fair fight. Two 160-pound middleweight boxers fighting is a fair fight. "Fair" can also mean "acceptable." One school grading system uses the words "excellent," "good," "fair," "poor," and "failing." Notice that in this context "fair" is not as good as "good." "Fair enough" means that the speaker has decided that some proposal, argument, or explanation is acceptable. A: "How can you vote for X? X lies all the time." B: "Your candidate, Y, has lied, too, for example about thus-and-such." A: "Fair enough. I see your point. It's valid. I still think X lies much more than Y, but I agree that they both lie."

As Zach said, it can have a negative meaning, which indicates that you don't want to argue any more but you don't agree. But it can also have a neutral or more positive meaning: "Do you like chocolate? Yes, but only dark chocolate. Fair enough - not everyone likes all kinds of chocolate.