You need to review the ToS and CoC for Xbox live.

B. Don’t do the following.

• Don't use the Services to do anything illegal. You are responsible for your actions and the consequences of your actions on the service, not Microsoft.
• Don't harass, abuse, or spam other players, or encourage other players to do so.
• Don't scream, yell, threaten, or stalk other players, or encourage other players to do so.
• Don't create a gamertag, profile content, Avatar action, Avatar content, or in-game content that other users may be offended by. This includes, without limitation, anything related to or suggestive of: profane words/phrases, topics or content of a sexual nature, hate speech (including but not limited to racial, ethnic, or religious slurs), illegal drugs/controlled substances, or illegal activities.
• Don't create a gamertag, profile content, Avatar action, Avatar content, or in-game content that references controversial religious topics, notorious people, organizations, or sensitive current or historical events that may be considered inappropriate.
• Don't distribute, post, publish, upload, disseminate or discuss defamatory, infringing, obscene, sexual or unlawful materials in any format (images, audio, video, text, etc.). Prohibited materials include, without limitation, child pornography or illegal drugs. “Sound alike” words or phrases or puns that reference these topics are also prohibited.
• Don't post links to websites that violate the Code of Conduct.
• Don't give out personal information of other players (such as their real name, address, phone number, credit card number, etc.) in any way (including, without limitation, through voice chat or the names you create for your gamertag or mottos). This information could be used by other players for illegal or harmful purposes. You should also avoid giving out your own personal information.
• Don't cheat in a game unless cheats have been deliberately enabled.
• Don't modify or hack game content to create cheats.
• Don’t make unauthorized modifications to your account profile or its contents.
• Don't intentionally play with someone who is using unauthorized software or methods to help inflate your game rank or gamerscore.
• Don't post links to materials that could harm other users' computers or would allow others to inappropriately access software or Web sites.
• Don’t lend, transfer, sell, or otherwise provide access to your account to any individual.
• Don’t use your account for commercial purposes (including, without limitation, trading services or in-game content for currency or Microsoft Points).
• Don't impersonate, harass, or defame Microsoft employees, moderators, or staff members.
• Don't use the forums or chats for any commercial purpose. You may only create an account for yourself as an individual. You may not create an account for your corporation or other business entity.
• Any non-game-related conversation that takes up a substantial amount of the forum or chat space and prevents users from finding game-related information may be considered a violation of the Code of Conduct.