The party is in a possession of a magic bag of carrying which can hold an unlimited number of items. All items from the bag are accessible by any party member.
But the equipment they wear and use in combat is not supported by any magic so what they can wear is limited by maximum encumbrance. Exceeding maximum encumbrance is possible but results in significant penalties.
Each character can wear 1x Head wear, 1x Body armor, 1x Weapon, 1x Shield, 3x Accessories (but maximum one of each accessory type, so can’t wear 2 girdles).
There are no class limits to what each character can wear, so in theory there can be a wizard with a heavy plate armor wielding a long sword. But class determines maximum allowed encumbrance, so in practice knights will end up with the full plate armor and a large shield while wizards will tend to wear robes or leather armors. Of course you can always use the rare Girdle of Carrying to boost maximum encumbrance of the feeble wizard.
Maximum encumbrance is also affected by race (dwarves have it higher elves lower).
There are two grades of penalties for exceeding maximum encumbrance:
1) Overburdened (the encumbrance turns yellow), it yields 50% penalty to melee combat and magic use.
2) Crushed (the encumbrance turns red), it yields 75% penalty to melee combat and magic use.
How to increase Maximum Encumbrance?
1) Choose strong fighter class (especially Knights are masters of Encumbrance which allows them to wear the heaviest equipment).
2) Choose dwarves (they get +1 to Maximum Encumbrance) and avoid fragile Elves (they get -1 to Maximum Encumbrance).
3) Invest in Strength (every 10 points of Strength the character gets +1 Maximum Encumbrance) .
4) Equip rare items that boost Maximum Encumbrance (like the famous Girdle of Carrying).
Equipment can improve statistics (Damage, Arcane, Armor).
Equipment can improve attributes (Strength, Toughness, Dexterity, Knowledge, Willpower).
Equipment can grant resistances to damage (Fire, Cold, Lightning, Acid).
Equipment can grant immunities to effects (Poison, Fear, Paralysis, etc).
Weapons can have a special attack property (Elvenblade, Whirling, etc).
Equipment can have special effects (Protect, Carry, etc).
Each item (except accessories) has encumbrance which determine how heavy and troublesome it is to wear and use. Exceeding allowed encumbrance yields penalties.
Note that Mithrtil items are lighter and use less encumbrance points than similar items made from other materials.
There are two types of shops in Amberland. Regular shops and magic shops. Regular shop sells unlimited number of items and accepts gold as a payment. Magic shop sells a limited number of items, for example it might have only one “Girdle of Carrying” and it only accepts crystals as payment.
At the beginning there are not many items in shops, but as you explore the land you will stumble on imprisoned master craftsmen. Each time you free a master craftsman new items will appear in shops.