What you are looking for here is a model release, which lays out exactly what can and cannot be done with a picture taken in private. From the wiki article above:
No release is required for publication, as news, of a photo taken of an identifiable person when the person is in a public place. In general, no release is required for publication of a photo taken of an identifiable person when the person is in a public space unless the use is for trade or direct commercial use, which is defined as promoting a product, service, or idea. Publication of a photo of an identifiable person, even if taken when the person is in a public place, for commercial use, without a model release signed by that person, can result in civil liability for whoever publishes the photograph.
Note that no model release is needed for the act of taking the photograph. Rather, if needed, the model release applies to the publication of the photograph. Liability rests solely with the publisher, except under special conditions. The photographer is typically not the publisher of the photograph, but usually licenses the photograph to someone else to publish. It is typical for the photographer to obtain the model release because he is merely present at the time and can get it, but also because it gives him more opportunity to license the photograph later to a party who wishes to publish it. Nevertheless, unless a photo is actually published, no model release is required.
Note that the issue of model release forms and liability waivers is a legal area related to privacy and is separate from copyright. Also, the need for model releases pertains to public use of the photos: i.e., publishing them, commercially or not. The act of taking a photo of someone in a public setting without a model release, or of viewing or non-commercially showing such a photo in private, generally does not create legal exposure, at least in the United States.