If you add the binding as said leave about one inch on either end of the smaller piece so you can mitre in the rest of the binding......you would do this process for any time you needed to add on or join up binding pieces That way it will lie as smoothly as possible. this works for both sides of the quilt. YOur sleeve opening is the beginning and the end of your binding journey.
Check out the about.sew. com site and look at binding...It will give you some help.