Truth in advertising; Fargo claims of being a true story [duplicate]

No. It is not against the law. Otherwise the Coen brothers (and many others) would be in jail.

Also, to just name one other occurrence of the "true story" bit before a movie, eleven years earlier, 1985's Return of the Living Dead also claimed to be based on a true story. The trailer is here, and the movie (for however long it lasts), is here. EDIT : The YouTube version doesn't have the screenshot I was talking about, so I captured it from my DVD copy:

And that movie is about lucid, fast zombies.

Movies are not encyclopedias. They are not facts overseen by a committee to ensure accuracy. Even docudramas and biopics are not 100% accurate.

Sound advice:

If you're wondering how he eats and breathes

And other science facts,

Just repeat to yourself "It's just a show,

I should really just relax

For Mystery Science Theater 3000."