Paying for and iPhone that's not working and it's still on warranty.

I bought an iPhone 8 from MTN with contract. 2 months back. Phone only worked for 3weeks. It fall before but that's not the reason for it to stop working, it didn't want to charge. I took it to MTN. They said I must book it for repairs and I'll get another phone. However I still didn't get it and i suspect they sold me an old iPhone. I called them today they said it was rejected coz it has a scratch. So it must be re booked for repairs and I must pay for charges. But then its still on warranty so can't they give me a new phone. I asked if I can cancel the contract, they said I'll have to pay half of the amount. But why pay for something I'm not using .