I feel that they broke their service agreement by not supplying me with a working phone. I would gladly have stayed if they had replace the non-working phone with any working phone, regardless of lesser monetary value.
Can I take this to small claims court?
depends on the terms of the arbitration clause. but if they are pursuing you for $400, bringing them to court may be a mistake. it's unlikely they will sue you over such a small amount, but they can counterclaim against you if you bring them into court. you can protect your credit rating by notifying the credit bureaus that the debt is disputed.
That's a great point. Really helpful!
You're welcome. Don't forget to mark answers as "Helpful" and "Best Answer."