Shattered Kingdoms

What happens if armor is too big or small for you?

Reduced in armor protection? That is my understanding, but i have no solid proof.

Does it matter if the armor has little protection as it is? (e.g. clothing) What about enchants? Are they reduced?

Thanks grep. I've tried searching for things like "armor size" but generally the search doesn't give the results I want (or gives 20 pages of wrong results).