Fair is the quality of the item; it doesn't have to do with whether it is broken or not. If the durability falls to 0, you have to repair the item in order to use it again. Equipped weapons or armor which are broken or will need to be repaired soon will become represented and colored in the upper right of the screen. Yellow is semi-near breaking, orange is closer to it, and red means that it needs to be repaired before you can use it again. The easiest way to tell the exact durability is to check the fraction by dragging your cursor over the item:
Let's say that the fraction indicated in the item's window is 17/112. This means that it is very near breaking. 112/112 is in perfect condition, and 0/112 is broken.