Generally defined as "Don't take the piss." Often quoted as an in-joke, to someone making a foolish suggestion or just taking liberties.
You can do anything you like, mate, but Rule 7 applies
The cake is a lie
Ed: Yo, Dave, manager says we will probably get a promotion if we meet the sales expectations for this quarter.
Dave: Yeah, don’t get your hopes up on that one, Ed. Rule 7 The cake is a lie.
Ed: Really, aw crap.
Rule 7 - If it can be done, the Japanese have done it better. If it can't, they have.
"God... I have been playing Dark Souls a month and still no progress man..."
"Rule 7 - Some Japanese guy beat it in 90 minutes."
"What the - HOW!?!?!"
Respects the Rule 7
Dude 1 : Hi dude, you have some news?
Dude 2 : Yeah the Rule 7.
Dude 1 : What's that Rule?
Dude 2 : Respect the Rule 7.
Dude 1 : Ok so tell me what is that Rule.
Dude 2 : Respect the Rule 7...
Dude 1 : How can i respect it if you dont tell me what it is!?
Dude 2 : I just said what is the Rule so respect it!!
Dude 1 : But what is it!?!?
Dude 2 : Respecte the Rule 7!!!
Dude 1 : JUST TELL ME WHA'S THE FREAKING RULE!!!
Dude 2 : I JUST SAID IT!!! RESPECTE THE RULE 7!!!
Where a user of a chat site (omegle, chatroullete, etc.) will not:
a. Disconnect from a conversation
b. Direct the flow of a conversation
c. Lie about an answer to a question*
*the only exception is if asked for social security number, phone number, full name, or anyway they can know who you are in "real life"
Stranger: So what do you want to talk about?
You: well, I can't really decide, I use rule 7.