Mercule
Adventurer
It depends, of course. 
First, the GM is entitled to have fun, too. Figure out whether you're willing (and able) to run a sandbox game where the PCs are self-motivated and not entirely ethical. If not, that doesn't mean either you or they are wrong; it just means you aren't interested in playing the same game. My friends and I are particularly bloodthirsty in Catan and we've actually offended visitors, but it's just in fun, for us. No big deal, just know who you can sit down with.
If you're up for it, then let them have their fun. It's not my favorite way to play D&D, but I prefer it to just walking through modules. (Self-motivated PCs is my holy grail, but I like heroes -- or, at least, a team.)
Some groups are fine with hand-waving descriptive "fluff" like alignment or priestly codes. Again, you'll have to decide whether you can accept this, assuming your players want to. This is probably the biggest risk of a mismatch, IMO, so you might want to feel them out carefully. It sounds like you'd have a problem with it, though (as would I).
I've learned, over the years, that it's better to react than demand. Put another way, alignment should be descriptive not proscriptive. Get a clear picture in your mind of what Law looks like compared to Chaos and Good vs. Evil*. The GM has final say in matters of morality -- Vampire taught me that -- but it's good to be open about what your criteria are. If the PCs then act like they're CN, tell the player that their character is CN. There's no penalty assigned (beyond certain magic items, priestly vows, etc.), so it's just a description of how they're acting; move on with life.
If they disrupt a town, have the authorities react logically. As has been pointed out, that doesn't always mean the city watch. Don't mess with the mob (would you rather have Murphy or Marcone mad at you, if you've read Dresden?). Taken far enough, you get a kind of reverse dungeon going on, with the PCs trying to stay alive. I've been on that side and it's a blast -- in small doses.
* Sometime in 1E, I settled on Lawful beings having a tendency to think/act in terms of groups, being structured, and have expectations of conformity (of behavior or situations) while Chaotic creatures tend to be flexible, handle exceptions well, and think about individuals. Ethically neutral folks balance the two. Good characters tend to put the well-being of others above their own, with the best having the ability to become martyrs. Evil characters put their own desires first, with the worst having no regard for others or even actively reveling in pain. Morally neutral types are, again, balanced, putting themselves in parity with others, which generally translates to self-interest unless the other person is in worse shape and/or you can help them without too much risk to yourself. Chaotic is not insane and Lawful is not stupid.

First, the GM is entitled to have fun, too. Figure out whether you're willing (and able) to run a sandbox game where the PCs are self-motivated and not entirely ethical. If not, that doesn't mean either you or they are wrong; it just means you aren't interested in playing the same game. My friends and I are particularly bloodthirsty in Catan and we've actually offended visitors, but it's just in fun, for us. No big deal, just know who you can sit down with.
If you're up for it, then let them have their fun. It's not my favorite way to play D&D, but I prefer it to just walking through modules. (Self-motivated PCs is my holy grail, but I like heroes -- or, at least, a team.)
Some groups are fine with hand-waving descriptive "fluff" like alignment or priestly codes. Again, you'll have to decide whether you can accept this, assuming your players want to. This is probably the biggest risk of a mismatch, IMO, so you might want to feel them out carefully. It sounds like you'd have a problem with it, though (as would I).
I've learned, over the years, that it's better to react than demand. Put another way, alignment should be descriptive not proscriptive. Get a clear picture in your mind of what Law looks like compared to Chaos and Good vs. Evil*. The GM has final say in matters of morality -- Vampire taught me that -- but it's good to be open about what your criteria are. If the PCs then act like they're CN, tell the player that their character is CN. There's no penalty assigned (beyond certain magic items, priestly vows, etc.), so it's just a description of how they're acting; move on with life.
If they disrupt a town, have the authorities react logically. As has been pointed out, that doesn't always mean the city watch. Don't mess with the mob (would you rather have Murphy or Marcone mad at you, if you've read Dresden?). Taken far enough, you get a kind of reverse dungeon going on, with the PCs trying to stay alive. I've been on that side and it's a blast -- in small doses.
* Sometime in 1E, I settled on Lawful beings having a tendency to think/act in terms of groups, being structured, and have expectations of conformity (of behavior or situations) while Chaotic creatures tend to be flexible, handle exceptions well, and think about individuals. Ethically neutral folks balance the two. Good characters tend to put the well-being of others above their own, with the best having the ability to become martyrs. Evil characters put their own desires first, with the worst having no regard for others or even actively reveling in pain. Morally neutral types are, again, balanced, putting themselves in parity with others, which generally translates to self-interest unless the other person is in worse shape and/or you can help them without too much risk to yourself. Chaotic is not insane and Lawful is not stupid.