So i recently got into an argument with a friend of mine over that stupid Facebook movie that's coming out.

The argument was centered around the rights to the movie...specifically the person it is based on.

Basically....is it illegal to create a movie based on someone without signing some kind of contract with them?

The nature of it began because there was rumor that Mark Zuckerburg, whom the movie is based on, expressed discontent towards the movie. He said something along the lines of "I really wish they wouldn't create a movie about me while i'm still alive."

If he wanted to, could he sue the creators of the movie for his likeness? That being said, could celebrities sue tv shows that parody their likeness? It seems like there would be too much gray area.

Yeah, uh-huh...that's what they all say.
the film will have a disclaimer stating that the events and characters of the film are entirely fictitious and any resemblance to real people or events is purely coincidental
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I think after this relentless adding for the last 10 mins, that Dan is the coolest looking. Goddamn welsh people and my great etc etc etc etc etc granddad is welsh.
If you get their expressed consent to do it, it's not illegal. I'm assuming the company making the film got consent.
That's an interesting question.. I don't think so. As long as there isn't any slander or defamation involved.

As for parodies, I don't think any court would uphold that as slander.
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So last year, I put some potatoes in this jar and forgot about them. Today, I found them, and when I opened the jar, there is a puddle at the bottom and it smells like alcohol. If I drink this, do you think I will die, or have I made potato vodka?