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Area of effect
Area of Effect (AoE) effects target multiple targets in a designated area. The result can be damage or some harmful or beneficial magical effect. Unlike Dungeons and Dragons, in DDO, (most*) AoE offensive spells do not harm or damage party members.
Examples of AoE effects are fireball (an offensive/damage spell), Magic Circle Against Evil (a buffing spell), Cleave (an AoE melee attack), and the Two Handed Fighting style (which can cause a small "Glancing blow" effect).
AoE attacks can have unintended and/or undesired results, such as causing aggro on nearby enemies, and/or damaging or breaking nearby NPCs or items that you don't want to affect. In some quests, it is important to be very careful when using AoE effects, for fear of failing a quest requirement to "Do not kill X" NPC.
(* Some AoE spells, like Grease, Sleet Storm or Obscuring Mist, affect all movement or vision in the area, of both friends and enemies alike. Use wisely if you want to keep your friends friendly.)