Why provide for arbitration in commercial leases? Proponents of
arbitration cite its efficiency, privacy, cost savings, control, flexibility and
less adversarial approach as virtues. They also point to the relative ease
with which victors may enforce arbitration awards and the limited right to
review such awards. 1 Landlords and tenants need an effective way to
manage the risks associated with disputes. Arbitration can provide what
landlords and tenants need at less cost and time than litigation, particularly
for smaller disputes that arise during the lease term. For this reason, some
landlords insist on having an arbitration clause in commercial leases.
However, given the wide range of disputes that may arise over the course
of a lease term, commercial landlords and their attorneys should carefully
consider the kinds of disputes for which the advantages of arbitration are
most likely to be realized, and identify those for which litigation may be
preferred. This article explores some landlord-tenant disputes that are well
suited to arbitration, including “baseball arbitration,” and offers some
suggestions for modifying standard arbitration provisions.

I. Optional versus Mandatory Arbitration

The right to compel arbitration is rooted in the contractual relationship
between the parties; as a result, parties to commercial contracts, including