This paper investigates fairness in a wireless LAN environment in which stations experience unequal signal qualities due to location and interference factors. This causes differences in transmission rate among mobile stations due to the use of link adaptation schemes. We analyse fairness in the presence of these impairments for the distributed contention based access mechanisms of the IEEE 802.11 and 802.11e standards. The notion of fairness is explored in terms of utility derived from the network (i.e. throughput) and allocated resources (i.e. amount of time permitted to transmit). We show how fairness can be achieved by judicious choice of parameters and study the impact of these choices on capacity. Finally, we demonstrate how these findings could affect other related designs including admission control and charging schemes.