All characters and creatures have a Will score. It is equal to their Spirit + 6 + any miscellaneous modifiers (such as from Discipline). They also have a Minimum Will score, which is equal to their Will minus 6. The primary use of the Will score is in determining the effects of Morale damage.
Morale damage works in a method very similar to normal damage. If a character takes more Morale Damage from a single source than his Minimum Will score, he gets a Morale penalty. This decreases his Will by 1.
If he takes more Morale damage than his Will score, depending on the source, something happens:
Fear: If a character's Will is beaten by a Fear effect, he is panicked. The character flees as fast as possible from the source of fear, as well as any other dangers he encounters during the escape. If there are multiple possible escape paths, roll a scatter die and run in that direction. The character may still make defence rolls normally. A panicked creature can use spells, skills, and techniques to aid the flight, and in fact must do so if they are the fastest means of escape. A fleeing character will attack anyone that prevents him from fleeing.
Insanity: If a character's Will is beaten by an insanity effect, he is treated as Confused until at least one morale penalty has been removed.
Rage: If the character‚s Will is beaten by a Rage effect, he flies into a screaming frenzy. What exactly happens depends a little on the situation, but generally he attacks the source of his rage, or failing that any nearby creature. If the GM approves, rage can manifest in other ways than physical combat. He takes a -1 penalty to all Dexterity- and Intelligence-based skills. Any activity that requires focus or concentration (such as casting a spell) cannot be done while raging. If the character has ranks in the Berserk skill or a similar ability, the ability automatically activates ƒ so a skilled enough Berserker can actually benefit in certain ways from being forced into a rage.
Untyped: If the character's Will is beaten by morale damage that does not specify a type (like fear or insanity), the character takes two morale penalties instead of any other effect.
If the character's will is reduced to 0, he gains the Broken status, effectively giving up. He cannot take any actions, move, speak, or make defence rolls. The character is Helpless. A character's Morale cannot fall below zero. Every round, the character can make a Spirit check against DC 10. On a success, the character is not broken and he recovers one morale penalty. On a failure, the DC decreases by one, so a character can generally shake off the Broken status in three rounds or so. At this point, the character removes a single morale penalty.
Skills such as Discipline can increase a character's Will, and Charisma can be used to help allies who have taken morale penalties.
If a character goes for a full, relatively calm hour without taking any morale penalties, he removes all morale penalties.