When a batted ball has not settled or been touched or passed a base. A batted ball must meet one of these conditions before the determination can be made on whether it is fair or foul.
Wow...great answers. And I thought it was a simple question with one answer. You all may be right.
My answer is "a fly ball caught in foul territory".
If you look at the ASA's definition of "foul ball", you'll see that a ball caught in foul territory is not "foul". A ball hit and caught in foul territory does not qualify as a fair ball either.